In early 2008, the housing crisis and rising oil prices increased the risk of recession in the United States. What fiscal policy action was taken by Congress and the president to counter these events?
A) The Federal Reserve cut its target for the federal funds rate.
B) There was an increase in government spending on defense and unemployment compensation.
C) Taxpayers were given rebates on taxes they already paid.
D) Income taxes were raised to reduce the federal budget deficit and reduce interest rates.
Answer: C
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Economists refer to the inputs that firms use to produce goods and services as
a. derived factors. b. derived resources. c. factors of production. d. instruments of revenue.
If the MPP of an additional unit of labor is 3 units per hour, product price is constant at $8 per unit, and the wage rate is $26 per hour, then
A. Product price must be reduced if profits are to be made. B. The employer should lower wages and accept less employment of labor. C. The additional unit of labor should be employed. D. The additional unit of labor should not be employed because it costs more than it is worth.