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-(Figure: Fiscal Policy and the End of the Great Depression) Refer to Figure: Fiscal Policy and the End of the Great Depression. The period from 1939 through 1943 would seem to indicate that in the short run a large increase in government deficit spending can _____ the unemployment rate.
A) reduce
B) increase
C) not affect
D) reduce or increase

Question

Use the following to answer questions: 
-(Figure: Fiscal Policy and the End of the Great Depression) Refer to Figure: Fiscal Policy and the End of the Great Depression. The period from 1939 through 1943 would seem to indicate that in the short run a large increase in government deficit spending can _____ the unemployment rate.
A) reduce 
B) increase 
C) not affect 
D) reduce or increase

Quizplus · Accepted Answer

The graph shows that when government spending increased from 1939 to 1943, unemployment decreased. This indicates that in the short run, a large increase in government deficit spending can reduce the unemployment rate.

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