Unemployment Compensation and Welfare Payments Tend to Stabilize the Economy

question 25

Multiple Choice

Unemployment compensation and welfare payments tend to stabilize the economy by

• A) holding government expenditures at a constant level.
• B) accelerating the decrease in disposable income caused by a fall in GDP.
• C) reducing corporate dividends when GDP increases.
• D) being financed by taxes whose revenues rise and fall as the level of employment rises and falls.
• E) equalizing the burden of inflation.

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