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

question 186

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 statement 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.