When Workers Lose Their Job, They File for Unemployment Benefits;

question 252

Multiple Choice

When workers lose their job, they file for unemployment benefits; therefore government spending on such programs naturally rises during recessions. As the economy recovers and people go back to work, spending on unemployment programs shrinks. Based on the given information, which of the following is correct?

• A) Unemployment benefit programs are an example of discretionary fiscal policy.
• B) Unemployment compensation is a form of an automatic stabilizer.
• C) The spending on unemployment benefits is designed to increase short-run aggregate supply during recessions.
• D) Unemployment benefit programs are an example of a supply-side policy.

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Definitions:

Selling Price

The amount of money for which a product or service is sold to the consumer.

Overhead Expenses

Ongoing costs involved in operating a business that are not directly tied to providing goods or services, such as rent, utilities, and administration costs.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Selling Price

The selling price is the amount a buyer pays to acquire a product or service from a seller.