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.

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Definitions:

Endogamous

Pertaining to the practice of marrying within a specific social group, caste, or ethnicity, often to maintain cultural or religious continuity.

Incestuous

Involving sexual relations between close relatives who are forbidden by law or cultural norms to marry.

Economic Unit

A group of individuals, typically members of a family, seen as a single entity for economic and financial analysis.

Emotionally Committed

Describes a state of being deeply invested in a relationship or cause, involving significant emotional attachment and dedication.