which of the following is not an automatic stabilizer for the economy?

Question

a.tax cuts
b.progressive federal income taxes
c.welfare programs
d.unemployment insurance programs

Answer 1

a. tax cuts

Income taxes, welfare programs and unemployment insurance are three typical automatic stabilizer, which is, by definition, an economic policy or program that increases or decreases automatically to offset the current economic trend WITHOUT government assistance.

On the contrary, tax cuts, with prolonged inside lags(introduction of bills, committee consideration, congressional debate and vote, passage in both chambers,...), don't function automatically.

Answer 2

I think automatic stabilizer is throwing us. At any rate the only item on your list that does not act like an insurance policy to help the poor automatically is 'A' tax cuts which are not 'automatic'. The others only sort of automatically kick in to help us when we are down on our luck.

Answer 3

The question's too ambiguous, because you could make a good argument for and against each one.

Answer 4

b. taxes never 'stabilize' an economy.