Which of the Following Is Not an Automatic Stabilizer

question 9

Multiple Choice

Which of the following is not an automatic stabilizer?

• A)the minimum wage
• B)the unemployment compensation system
• C)the federal income tax
• D)the welfare system

---

Definitions:

Budget Deficit

The situation where a government's expenditures exceed its revenues over a specific period of time, leading to a need for borrowing or spending cuts.

Budget Surplus

The situation in which a government's revenues exceed its expenditures during a given period, indicating financial health.

Public Saving

The portion of national saving that is accumulated by the government sector, often reflected as the difference between government revenues and expenditures.

National Saving

The total amount of savings generated within a country, which is the sum of private savings by households and businesses plus public savings from the government’s budget.