Reducing transfer payments is an appropriate way to counteract a recessionary gap.

Name: Reducing transfer payments is an appropriate way to counteract a recessionary gap.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Reducing transfer payments, such as welfare or unemployment benefits, would decrease aggregate demand and exacerbate a recessionary gap. The appropriate way to counteract a recessionary gap is to increase government spending or decrease taxes, which would increase aggregate demand and stimulate economic growth.

Reducing Transfer Payments Is an Appropriate Way to Counteract a Recessionary