During recessions, government spending usually:

Question

Quizplus · Accepted Answer

During recessions, there is usually an increase in unemployment and a decrease in economic activity. This leads to a decrease in tax revenue for the government. To stimulate the economy, the government will usually increase its spending, especially on programs such as transfer payments (e.g. unemployment benefits, welfare programs) which help to support families and individuals who have been negatively impacted by the recession. Therefore, during recessions, government spending usually increases because transfer payments increase.

During Recessions, Government Spending Usually