Which one or more of the following items of Government Budget act as automatic stabilisers in an…
Progressive income taxes (C) and unemployment benefit transfers (B) automatically vary counter-cyclically with national income without new legislative action, functioning as…
Choose your answer
Which one or more of the following items of Government Budget act as automatic stabilisers in an economy ?
A. Interest payments on public debt.
B. Unemployment benefits provided by the Governments.
C. Income Tax
D. Dearness allowance to government employees.
Answer and explanation
Correct answer B
Progressive income taxes (C) and unemployment benefit transfers (B) automatically vary counter-cyclically with national income without new legislative action, functioning as automatic fiscal stabilisers.
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RPSC Assistant Professor (College Education)