Did the fiscal policy of the 1930s bring an end to the Great Depression?
a. No, government spending and budget deficits as a share of GDP were relatively small during the 1930s, and there is little evidence that fiscal policy did much to stimulate output.
b. No, even though budget deficits steadily rose from 2 percent of GDP in the early 1930s to more than 10 percent of GDP in 1939, this expansionary fiscal policy had little effect on output.
c. Yes, even though the spending programs of the New Deal led to budget deficits, they also led to a steady reduction in the rate of unemployment during the latter half of the 1930s.
d. Yes, the fiscal policy that kept the federal budget balanced throughout the 1930s created a stable business climate and eventually stimulated investment.
A
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Refer to Table 23-3. Given the consumption schedule in the table above, the marginal propensity to consume is
A) 0.1. B) 0.3. C) 0.6. D) 0.9.
The decline in stock prices from 2000 through 2002
A) increased individuals' willingness to spend. B) had no effect on individual spending. C) reduced individuals' willingness to spend. D) increased individual wealth.
A financial account surplus necessarily implies
A) a balance of payments surplus. B) a current account surplus. C) a current account deficit. D) an increase in the nation's official reserve assets.
If a toy store overestimates the demand for a toy in 2004 and, as a result, has an unexpectedly large number of toys in stock at the end of the year, the value of the inventory of these toys will be considered as: a. investment in 2004
b. investment in 2005. c. consumption in 2004. d. consumption in 2005. e. a part of GDP when the toys are sold.