Economics · Fiscal Policy
Which of the following acts as an automatic stabilizer during an economic recession?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An increase in government spending due to more people qualifying for unemployment benefits✓
- 2A drop in stock market prices across cyclical industries
- 3Discretionary fiscal stimulus packages introduced by parliament
- 4Central bank interventions in key policy interest rates
Correct answer
An increase in government spending due to more people qualifying for unemployment benefits
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