In the context of macroeconomic   stabilization policies, which scenario best illustrates the concept of "automatic stabilizers"?    a) A government increases spending on infrastructure projects during a recession as part of a deliberate fiscal stimulus package.    b) During an economic downturn, unemployment benefits automatically increase as more people become unemployed, providing a buffer to the economy.    c) The central bank adjusts the interest rates in response to changes in inflation and unemployment data.    d) A government adopts a new policy to increase taxes on high-income earners during periods of economic boom.

ENGR.ECONOMIC ANALYSIS
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In the context of macroeconomic

 

stabilization policies, which scenario best illustrates the concept of "automatic stabilizers"? 

 

a) A government increases spending on infrastructure projects during a recession as part of a deliberate fiscal stimulus package. 

 

b) During an economic downturn, unemployment benefits automatically increase as more people become unemployed, providing a buffer to the economy. 

 

c) The central bank adjusts the interest rates in response to changes in inflation and unemployment data. 

 

d) A government adopts a new policy to increase taxes on high-income earners during periods of economic boom.

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