Question

Unemployment compensation is rev: 06_13_2018 Multiple Choice an automatic stabilizer because it rises as income increases, slowing an economic expansion. an automatic stabilizer because it falls as income decreases, slowing an economic contraction. an automatic stabilizer because it falls as income increases, slowing an economic expansion. not an automatic stabilizer.

Answer 1

Answer:an automatic stabilizer because it falls as income increases, slowing an economic expansion

Explanation:Unemployment Compensation are benefits provided by government to serve as a temporary income when one loses his or her job through no fault of him or her.

The money partly helps one pay expenses while looking for new job

Unemployment compensation is a fiscal policy used as an Automatic stabilizers to stabilise fluctuations in a nation's economic activity.

Similarly, Unemployment compensation payments, falls when the economy is in a phase of expansion since there are few unemployed people filing claims for compensation and rise when the economy is high in recession and high rate of unemployment IE when there are many people filing claims for compensation.