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When the economy contracts, transfers... A not enough information to determine OB. Stay the same oc fall OD. rise
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Answer #1

When the economy contracts, the transfers payments increase. This is because when the economy contracts, unemployment increases and the overall income decreases. Hence, the government has to increase its spending in providing unemployment benefits and other welfare payments to the poor in order to ensure that a minimum basic level of consumption is attainable by all.

Ans: D. Rise

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