Which of the Following Scenarios Is an Example of an Automatic

question 72

Multiple Choice

Which of the following scenarios is an example of an automatic stabilizer?

• A) Increased unemployment rates cause the government to pay out more in unemployment insurance.
• B) Tax revenues increase due to a rise in nominal income during an economic expansion.
• C) Unemployment rates are reduced during an economic expansion and so government spending on TANF payments decreases.
• D) All of these scenarios exemplify automatic stabilizers.

---

Definitions:

Planned Approach

A methodical strategy designed in advance to achieve a specific goal or to solve a particular problem.

Trust Between

The level of confidence, reliability, and understanding existing among individuals, organizations, or systems, enabling a cooperative or interdependent relationship.

On-the-Job Training

Training provided to employees at their place of work, focusing on the practical application of skills necessary for their role.

Small and Medium

Generally refers to small and medium-sized businesses or enterprises characterized by their size, which falls below certain limits in terms of employees or revenue.