Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Employment-insurance payments. Cost-of-living escalators in government contracts and pensions. Free university tuition for unemployed workers after six months of unemployment, provided that they are under

  • Employment-insurance payments.
  • Cost-of-living escalators in government contracts and pensions.
  • Free university tuition for unemployed workers after six months of unemployment, provided that they are under 30 years old and have had five or more years of full-time work experience since high school.

From the given list, employment insurance is definitely an automatic stabilizer, but can you explain your rationale why the other two are not? What specifically disqualifies them?

During a recession, total public assistance payments and unemployment compensation payments automatically increase while income taxes automatically decrease. What do you think might be the impact on aggregate demand in the economy due to this?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics

Authors: David Colander

7th Edition

0073402869, 9780073402864

More Books

Students also viewed these Economics questions