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Economics Mcqseconomics-mcqs
Published
25 Feb 2025
Last updated
28 May 2026

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Automatic stabilizers belong to which category of economic policy tools?

Multiple choice question for Economics Mcqs. Select an option, then review the explanation below.

Choose the correct answer

Explanation

Automatic stabilizers, such as unemployment benefits and progressive taxation, are components of fiscal policy because they automatically adjust government spending and taxation to stabilize the economy without active intervention. Monetary policy, managed by central banks, involves controlling interest rates and money supply. Trade policy focuses on regulations related to imports and exports, while investment policy pertains to spending decisions by private entities or the government.

Practice related questions from the same subject.

  1. 1.According to the World Bank, countries are grouped into four categories based on which of the following criteria?
  2. 2.What is the likely effect of an increase in the money supply?
  3. 3.Which economic concept illustrates the inverse connection between inflation and unemployment?
  4. 4.Which of the following does not constitute a part of the Gross Domestic Product (GDP)?
  5. 5.Which of the following best describes classical economics?

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