3. Automatic stabilizers (a) Are government policies or programs that stabilize the economy without additional government action. (b) Include the progressive income tax and the negative income tax proposed by many economists. (c) Are favored by many economists because of the difficulty of getting the timing right using discretionary macroeconomic policy. (d) All the above (e) None of the above.

The objective of the question is to identify the correct statement(s) about automatic stabilizers in economics.Automatic stabilizers are indeed government policies or programs that stabilize the economy without additional government action. They are designed to offset fluctuations in a nation's economic activity without intervention by policymakers and respond to changes in economic conditions. So, statement (a) is correct.Automatic stabilizers do include the progressive income tax and the negative income tax proposed by many economists. A progressive income tax takes a larger percentage of income from high-income groups than from low-income groups and is based on the concept of ability to pay. A negative income tax is a system whereby people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government. So, statement (b) is correct.Automatic stabilizers are favored by many economists because of the difficulty of getting the timing right using discretionary macroeconomic policy. Discretionary macroeconomic policy involves deliberate manipulation of taxes and government spending by the government to influence the economy, which can be difficult to implement at the right time due to the lag between when a policy change is needed and when it takes effect. So, statement (c) is correct.Since all the statements (a), (b), and (c) are correct, the answer to the question is (d) All the above.Automatic stabilizers are government policies or programs that help stabilize the economy without additional government action, include the progressive income tax and the negative income tax, and are favored by many economists due to the difficulty of timing discretionary macroeconomic policy correctly. Therefore, all the given statements are correct.

Answered: 3. Automatic stabilizers (a)…

ENGR.ECONOMIC ANALYSIS

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		(a) Are government policies or programs that stabilize the economy without additional government action.
		(b) Include the progressive income tax and the negative income tax proposed by many economists.
		(c) Are favored by many economists because of the difficulty of getting the timing right using discretionary macroeconomic policy.
		(d) All the above
		(e) None of the above.