A recession causes
A) transfer payments and corporate profits to increase
B) military spending and corporate profits to increase
C) unemployment to increase and transfer payments to decrease
D) transfer payments to increase and corporate profits to decrease
E) household income and government transfer payments to decrease

Question

Quizplus · Accepted Answer

During a recession, transfer payments like unemployment benefits tend to increase as more people become unemployed. At the same time, corporate profits tend to decrease as consumer spending decreases. Therefore, choice D is the best answer as it accurately reflects these patterns.

A Recession Causes