Question

Automatic stabilizers are defined as A. policy that has no multiplier effects. B. actions taken by the President without Congressional consent to stabilize the economy. C. policy that stabilizes without the need for action by the government. D. discretionary policy taken to stabilize the economy. E. actions taken by an act of Congress to stabilize the economy.

Answer 1

Answer:

C. policy that stabilizes without the need for action by the government.

Explanation:

Automatic stabilizers -

It is the structure and feature of the modern government budgets , specially the welfare spending and the income taxes .

It acts for the fluctuations in the real value of the GDP .

During the process of recession , the government budget increases , in order to keep the national income high .

In the period of budget deficit , the automatic stabilizers reduces the size of the fluctuations in the country's GDP .