Which of the Following Best Describes the Impact of Fiscal

Question 30
Multiple Choice

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.