Needs-tested spending
A)increases in recessions and decreases in expansions.
B)decreases in recessions and increases in expansions.
C)does not change with the level of economic activity.
D)is always increasing regardless of whether we are in an expansion or a recession.
E)cannot be changed unless the government changes the spending laws.

Question

Quizplus · Accepted Answer

Needs-tested spending, such as unemployment insurance and food stamps, is designed to increase during times of economic hardship and decrease during times of economic growth. This is because more people require assistance during recessions when jobs are scarce, while fewer people need assistance during expansions when employment opportunities are more abundant.

Needs-Tested Spending