During a recession,higher welfare outlays:
A)increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy.
B)decrease the size of the budget deficit regardless of the government's discretionary fiscal policy.
C)increase the size of the budget deficit only if the government undertakes discretionary fiscal policy.
D)decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy.
E)have the same effect on the budget deficit as they do in times of expansion.

Question

Quizplus · Accepted Answer

During a recession, more people are likely to need welfare and other social assistance programs, increasing the outlays of the government. This increased spending will increase the size of the budget deficit, even if the government does not undertake discretionary fiscal policy.

During a Recession,higher Welfare Outlays