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there are institutional features that act as stabilizers. For
example, when there is a shock causing Y to fall and unemployment
to rise, the fact that the unemployed workers have the right to
receive unemployment compensation makes total government transfers
to the private sector go up (without an actual fiscal policy
decision). This mechanism is called an automatic stabilizer. Assume
that the unemployment compensation is financed by taxes. For
unemployment compensation to be an automatic stabilizer, should the
marginal propensity to consume of those being taxed be higher or
lower than the marginal propensity to consume of those receiving
the unemployment compensation? Provide a verbal or analytical
argument.