When workers lose their job,they file for unemployment benefits,so government spending on such programs naturally rises during recessions.As the economy recovers and people go back to work,spending on unemployment programs shrinks.Which of the following is CORRECT?

Question

Quizplus · Accepted Answer

Unemployment compensation is a form of automatic stabilizer because it automatically increases during recessions as more people lose their jobs and file for benefits, and it automatically decreases during economic expansions as fewer people need assistance. Discretionary fiscal policy involves intentional changes to government spending or taxes in response to economic conditions, and supply-side policy is a set of policies designed to increase the productive capacity of the economy. Therefore, options A, C, and D are incorrect.

When Workers Lose Their Job,they File for Unemployment Benefits,so Government