An advantage of automatic stabilizers is that

A) they are built into the economy by legislation and therefore are already in place when economic conditions change.
B) they give the government an opportunity to spend extra tax money collected.
C) they intensify changes in the business cycle.
D) they produce balanced budgets.
E) government transfer payments automatically decline during recessions.

Question

Sheldon Layman · Accepted Answer

Final Answer : A, Explanation :  Automatic stabilizers are measures built into the economy by legislation that help to stabilize economic fluctuations without any additional government action. They are already in place when economic conditions change and do not require any legislative or administrative action to take effect. Therefore, they are advantageous because they provide automatic stabilizing effects during a recession or boom without any additional government intervention required.

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