During a Recession, Total Public Assistance Payments and Unemployment Compensation

Multiple Choice

During a recession, total public assistance payments and unemployment compensation payments automatically increase while income taxes automatically decrease. Which of the following best describes the effect of these changes on aggregate demand?

A) ​Aggregate demand will be less than it would be without these automatic stabilizers.
B) ​Aggregate demand will be the same as it was before the recession.
C) ​Aggregate demand will be more than it would be without these automatic stabilizers.
D) ​Aggregate demand will be greater than it was before the recession.