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.
C
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Which of the following is not included in Nation A's financial account?
a. Foreign deposits of funds in savings accounts in Nation A. b. Foreign companies' profits on their operations in Nation A. c. Foreign purchases of Nation A's Treasury bills. d. All the above.
Suppose private saving in a closed economy is $12b and investment is $10b
a. National saving must equal $12b. b. Public saving must equal $2b. c. The government budget surplus must equal $2b. d. The government budget deficit must equal $2b.