If a government implements an increase in transfer payments during a recession, what is the primary underlying economic mechanism that is expected to drive an increase in aggregate demand?

When a government increases transfer payments during a recession, it gives money directly to individuals or families, such as through unemployment benefits or social security. This extra money helps people who may have lost their jobs or are struggling to buy basic needs. As these individuals spend the money on goods and services, businesses see an increase in sales, which can encourage them to produce more. For example, if a family receives extra support and buys groceries, the grocery store benefits, and may even hire more staff to meet the demand. Overall, this spending boosts the economy by increasing aggregate demand, which is the total amount of goods and services people want to buy.