If fiscal policy were able to exert a significant impact on the economy during the Great Depression, we would expect
A) an increase in government expenditures and a reduction in budget deficits.
B) an increase in government expenditures and an increase in budget deficits.
C) a decrease in government expenditures and a reduction in budget deficits.
D) a decrease in government expenditures and an increase in budget deficits.

Question

Quizplus · Accepted Answer

During the Great Depression, expansionary fiscal policy would involve increasing government expenditures to stimulate the economy, which would likely lead to an increase in budget deficits.

If Fiscal Policy Were Able to Exert a Significant Impact