Unemployment compensation payments
A) rise during a recession and thereby help stimulate consumption.
B) rise during a recession and thereby retard consumption.
C) rise during economic expansion and thereby help stimulate consumption.
D) rise during economic expansion and thereby retard consumption.

Question

Quizplus · Accepted Answer

Unemployment compensation payments rise during a recession as more people become unemployed. These payments provide support to the unemployed individuals and help maintain their disposable income, which, in turn, stimulates consumption. Therefore, Option A is the best choice.

Unemployment Compensation Payments