8. Automatic, or built-in, stabilizers Which of the following are examples of au

Question

8. Automatic, or built-in, stabilizers Which of the following are examples of automatic stabilizers? Check all that apply. As incomes rise, domestic investment rises as well. In 2001, partly in response to a recession, Congress enacted lower income tax rates and increased tax exemptions for married couples. As corporate profits rise during an economic expansion, corporate income tax revenues rise. As people spend more during an expansion, the additional spending on imports does not stimulate domestic production in the next round. As unemployment falls during an expansion, unemployment insurance payments decline.

Explanation / Answer

Ans:

Automatic stabilizers are policies which offset fluctuations in economic activity without intervention by the government .

Following will apply

As corporate profits rise during an economic expansion, corporate income tax revenues rise.

As unemploment falls during an expansion,unemployment insurance payments decline.

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.