In the initial stages of the Great Depression, fiscal authorities responded to the decline in
Output by
A) increasing government purchases to stimulate aggregate demand.
B) raising taxes to increase government revenue.
C) lowering taxes to encourage spending.
D) subsidizing private production to create jobs.

Question

Quizplus · Accepted Answer

During the initial stages of the Great Depression, many governments, including the United States, raised taxes in an attempt to balance budgets and increase government revenue, rather than immediately increasing spending or cutting taxes.

In the Initial Stages of the Great Depression, Fiscal Authorities