During economic contractions, government expenditure automatically:

Question

Quizplus · Accepted Answer

During economic contractions, government expenditure typically rises because of programs such as unemployment benefits. As more people become unemployed, the number of individuals who qualify for and receive unemployment benefits increases, leading to an increase in government spending. Additionally, other government programs such as subsidies and stimulus measures may be implemented during economic contractions to help stimulate economic growth, further increasing government expenditure.

During Economic Contractions, Government Expenditure Automatically