Times of recession cause the government to increase spending on transfer payments, which in turn can support economic recovery.

Question

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During a recession, people may experience job losses or reduced income, leading to decreased spending in the economy. To counter this, governments may increase spending on transfer payments such as unemployment benefits or tax refunds, providing a source of income for those affected and supporting consumer spending. This increased spending can stimulate economic growth and aid in recovery from the recession.

Times of Recession Cause the Government to Increase Spending on Transfer