Which of the Following Best Describes the Impact of Fiscal
Which of the following best describes the impact of fiscal policy during the Great Depression?
A)Despite the large increases in government spending as a share of GDP when the New Deal policies were initiated,the expansionary fiscal policy failed to stimulate demand.
B)Fiscal policy was focused on monetary expansion,when it should have focused on maintaining a balanced budget.
C)It is difficult to link expansionary fiscal policy with economic recovery because government spending and budget deficits were a relatively small portion of GDP prior to the beginning of World War II.
D)There is a direct correlation between increases in government spending as a share of GDP and increases in output and employment.
Which of the following is a lesson that can be learned from monetary policy during the Great Depression?
A)Monetary policy should be changed frequently in response to economic fluctuations.
B)Prolonged periods of monetary contraction will retard economic growth.
C)Low interest rates will direct an economy toward recovery.
D)Monetary policy should focus on variables such as output and employment.
Why do nations impose trade barriers,such as those instituted during the Great Depression,that make it difficult for their own citizens to trade with people in other countries?
A)Trade restrictions are a good way for a country to increase the total employment and income level of its citizens.
B)As the experience during the 1930s illustrates,trade restrictions are an effective way to increase exports and tax revenues.
C)Trade restrictions provide gains to domestic residents at the expense of foreigners.
D)Trade restrictions often provide benefits to highly visible special interest groups while imposing a less visible cost on the general populace.
Which of the following was true with regard to the Great Depression?
A)The policies of the New Deal brought the Great Depression to an end well before World War II.
B)Sound economic policy was followed during this era,which makes the length and severity of the Great Depression puzzling to economists.
C)The length and severity of the Great Depression was the result of unsound economic policies followed by both the Hoover and Roosevelt Administrations.
D)The Great Depression was largely the result of the highly expansionary monetary policy of the Fed during the 1930s.