Which of the following are examples of automatic stabilizers? Check all that app

Question

Which of the following are examples of automatic stabilizers? Check all that apply. In 2001, partly In response to a recession, Congress enacted lower Income tax rates and increased tax exemptions for married couples. As unemployment falls during an expansion, unemployment Insurance payments decline. As Incomes rise, domestic Investment rises as well. As people spend more during an expansion, the additional spending on imports does not stimulate domestic production In the next round. As people earn higher Incomes during an expansion, the progressive tax system requires them to pay higher average tax rates.

Explanation / Answer

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

As income rise, domestic investment rises as well(multiplier effect)

As people earn higher incomes during an expansion, the progressive tax system reuires them to pay higher average tax rates.

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