Which of the following is not an automatic stabilizer? a. Defense spending b. Unemployment compensation benefits c. Personal income taxes d. Welfare payments

a. Defense spending: It is the budget allocated by the government for military and defense purposes. b. Unemployment compensation benefits: These are government-provided financial benefits to individuals who have lost their jobs and are actively seeking new employment. c. Personal income taxes: These are taxes levied on individuals' earned income. d. Welfare payments: These are government assistance programs that provide financial support for individuals and families in need.

Automatic stabilizers are economic policies or programs that help to stabilize the economy without intervention from policymakers or government. They typically function by adjusting governmental spending, transfers, or taxes to offset economic fluctuations. From the given options, the following could be considered as automatic stabilizers: b. Unemployment compensation benefits: These benefits naturally increase during periods of high unemployment, providing financial support to those who lost their jobs, helping stabilize the economy. c. Personal income taxes: As personal income fluctuates with the economy, the taxes collected will also vary. During periods of economic growth, tax revenues will increase, while during downturns, tax revenues decrease, helping to stabilize the economy. d. Welfare payments: These are also countercyclical in nature, as they increase during economic downturns when people are more likely to need financial assistance and decrease during periods of economic growth when people are less likely to require support.

a. Defense spending: This option is not an automatic stabilizer as it usually does not vary according to economic fluctuations. Defense spending is generally determined by political decisions and military needs, rather than economic conditions. Therefore, it does not help stabilize the economy in the same way as the other options provided. Answer: The following option is not an automatic stabilizer: a. Defense spending