In an expansion,tax payments tend to increase and transfer payments tend to decrease.

Question

Quizplus · Accepted Answer

During an expansion, as the economy grows and more people are employed, tax payments tend to increase since there is more income being earned. On the other hand, transfer payments tend to decrease because there are fewer people who qualify for government assistance programs such as unemployment benefits. Therefore, the statement is true.

In an Expansion,tax Payments Tend to Increase and Transfer Payments