Question

02.
WHICH
OF THE
FOLLOWING IS TRUE OF
COMPENSATORY
SPENDING?
A) IT IS NECESSARY DORING
RECESSION
B) IT IS NECESSARY DURING
INFLATION
C) IT IS A BOILT-IN STABILISER
D) IT IS NOT NECESSARY​

Answer 1

Answer:

(B) is right..

Explanation:

hope it's helpful for you..

Answer 2

Option A is the correct answer.

Compensatory spending is necessary during recession.

1. Compensatory spending - When money is borrowed for spending by the government. The money thus raised is used to reenergize the slow economy.
2. Aggregate demand falls during recession consequently employment, consumption, investment etc. falls. This slows down the economy thus government interferes to revive the economy.