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Answered

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Which of the following is an example of an automatic stabilizer?

Spending on unemployment benefits falls when the economy enters a recession.

The amount of tax revenues collected rises when an economy is booming.

Low-income households lose their food stamp benefits when unemployment rises.

Governments debate implementing tax cuts when the economy is in a recession.

Sagot :

lawrencemma2165
B. The amount of tax revenues collected rises when an economy is booming.

Automatic stabilizers are spending and taxation changes that automatically expand or contract so as to temper business cycle fluctuations without any over action by the government. Automatic stabilizers include unemployment benefits and food stamps, which increased during down curns, and the income tax, which fluctuates with income.
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