how-does-unemployment-insurance-function-as-an-automatic-stabilizer-during-an-ec

Question

How does unemployment insurance function as an automatic stabilizer during an economic boom?

Accepted Answer

It decreases government spending by reducing benefits to the unemployed.

Answer

It increases taxes to fund additional unemployment benefits.

Answer

It maintains constant government spending regardless of unemployment rates.

Answer

It increases government spending by providing more benefits to the unemployed.