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How Are Transfer Payments, Such as Welfare Benefits, Affected During

Question 17

Multiple Choice

How are transfer payments, such as welfare benefits, affected during economic contractions?  


A)  Transfer payments automatically increase, reducing incomes further. 
B)  Transfer payments automatically increase, thus reducing the impact of the contraction on disposable income. 
C)  Transfer payments automatically decrease, because tax revenues fall and welfare benefits are no longer affordable. 
D)  Transfer payments automatically decrease, as a discretionary move on the part of Parliament to stimulate expansion.

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