ECONOMICS
AGGREGATE DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Progressive Income Tax
|
|
|
Unemployment Compensation
|
|
|
Balanced Budget Ammendment
|
|
|
Spending on a Military Conflict
|
|
|
Welfare Payments
|
Detailed explanation-1: -Unemployment insurance benefits, personal income taxes and corporate income taxes are all examples of automatic stabilization.
Detailed explanation-2: -The most prominent automatic stabilizers are taxes, unemployment insurance (UI), the Supplemental Nutrition Assistance Program (SNAP), and Medicaid.
Detailed explanation-3: -The three automatic stabilizers are income tax policy, corporate tax policy, and government transfer rules.
Detailed explanation-4: -An example of an automatic stabilizer is unemployment benefits. During recessions the economy experiences insufficient aggregate demand, the unemployment benefits help to increase aggregate demand.
Detailed explanation-5: -Unemployment benefits are an example of automatic economic stabilizers.