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Which of the following is an example of automatic stabilizers? responses

a income taxes
b unemployment payments
d discretionary increases in military spending
e transfer payments

User Cgotberg
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1 Answer

7 votes

Final answer:

Unemployment payments are an example of automatic stabilizers as they provide support during economic downturns by stimulating the economy through income redistribution. Therefore, the correct option is B.

Step-by-step explanation:

One example of automatic stabilizers is unemployment payments. When there is higher unemployment, the government provides unemployment benefits to those who are out of work. This helps stimulate the economy by providing individuals with income and increasing aggregate demand. Automatic stabilizers like unemployment payments help offset shifts in aggregate demand and provide support during economic downturns.

User Till Theis
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