Question

An example of automatic fiscal policy is Question 19 options: the unemployed automatically become eligible for unemployment benefits when they lose their jobs in a recession. when interest rates automatically fall in a recession. Congress passes a law during a recession that automatically extends unemployment benefits for those whose benefits will soon expire. a and b a, b and c

Answer 1

Answer:

a

Explanation:

Automatic fiscal policies are policies that adjust the economy automatically without the intervention of external agents . examples include progressive tax and transfer payments

In an expansion, progressive tax increases the tax paid and this reduces disposable income

In a contraction, tax paid is reduced and this increases disposable income

Congress passes a law during a recession that automatically extends unemployment benefits for those whose benefits will soon expire. this is an example of discretionary fiscal policy

Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.