Question

Unemployment compensation payments: a. rise during a recession and thus reduce the severity of the recession. b. fall during a recession and thus increase the severity of the recession. c. rise during a recession and thus increase the severity of the recession. d. rise during inflationary episodes and thus reduce the severity of the inflation.

Answer 1

Answer: Rise during recession and thus reduce the severity of the recession.

Explanation: An unemployment compensation payments also known as unemployment benefit is money paid to unemployed people in the society by the government, to sustain them financially until when they can secure a job.

During a recession when the economy normally is down and people tend to loss their jobs, the government increases the unemployment benefits to ease the impact of the recession on its citizens.