Which of the following describes the role of automatic stabilizers in the econom

Question

Which of the following describes the role of automatic stabilizers in the economy? Automatic stabilizers have a similar impact as discretionary fiscal policy but occur o automatically, without action by the government. Automatic stabilizers increase aggregate demand during recessions and reduce aggregate demand during expansions. Automatic stabilizers are discretionary changes to taxes, government spending, and transfers that Congress makes in attempt to improve the economy. Automatic stabilizers refer to industries that aren't subject to the fluctuations of the economy and therefore moderate the effects of recessions. Food, housing, and the military are examples of these industries which are usually more stable than the rest of the economy. Automatic stabilizers are changes in the money supply that occur automatically when inflation or unemployment occurs.

Explanation / Answer

Answer is a

Automatic stabilisers increase aggregate demand during recession to decrease the effect of recession without any government intervention.

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