Answered

The term "automatic stabilizers" describes:

A. Programs that are designed to stabilize the real rate of interest in the economy.
B. Programs that require action by the US President and Congress before they become active.
C. Programs that tend to reduce the size of the national debt during a period of recession.
D. Programs that respond automatically and counter-cyclically to changes in aggregate economic activity.



Answer :

GinnyAnswer

Final answer:

Automatic stabilizers are government programs that adjust automatically to stabilize the economy, such as income tax rates and unemployment benefits.


Explanation:

Automatic stabilizers are government programs that automatically adjust to counteract fluctuations in the economy without needing specific action from policymakers. For example, income tax rates and unemployment benefits are examples of automatic stabilizers that help stabilize real GDP during economic changes. These stabilizers play a crucial role in fiscal policy by influencing aggregate demand based on economic conditions.


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