During economic contractions,transfer payments such as welfare benefits _____.
A)automatically increase,reducing income further.
B)automatically increase,reducing the impact of the contraction on disposable income.
C)automatically decrease because tax revenues fall and welfare benefits are no longer affordable.
D)are decreased as a discretionary move on the part of Congress to stimulate expansion.
E)are increased as a discretionary move on the part of Congress to cushion recipients against the negative effects of economic contraction.

Question

Quizplus · Accepted Answer

Transfer payments such as welfare benefits automatically increase during economic contractions to reduce the impact of contraction on disposable income. This is a discretionary move by the government to cushion recipients against the negative effects of economic contraction.

During Economic Contractions,transfer Payments Such as Welfare Benefits _____