Which of the following occurs automatically during a recession?
A) Tax revenues increase.
B) The budget deficit becomes greater.
C) Government spending decreases.
D) The money supply increases.

Question

Quizplus · Accepted Answer

During a recession, government tax revenues typically decrease due to lower income and corporate profits, while spending on social welfare programs (like unemployment benefits) often increases. This combination leads to a larger budget deficit, as the government spends more than it collects in revenue.

Which of the Following Occurs Automatically During a Recession