Needs-tested spending _________during recessions and _________during expansions.
A) decreases; decreases
B) increases; increases
C) increases; decreases
D) decreases; increases

Question

Quizplus · Accepted Answer

Needs-tested spending, such as welfare and unemployment benefits, typically increases during recessions as more people become unemployed and in need of assistance. This increased spending helps to stimulate the economy by putting more money into the hands of consumers who are likely to spend it. During economic expansions, needs-tested spending typically decreases as fewer people are in need of assistance and government budgets may be tighter due to increased revenue.

Needs-Tested Spending _________During Recessions and _________During Expansions

Needs-Tested Spending _During Recessions and _During Expansions