The use of the U.S. federal budget to help stabilize the economy grew in reaction to the__________ and is known as __________.
A) stagflation of the 1970s; fiscal policy
B) Great Depression of the 1930s; monetary policy
C) Great Depression of the 1930s; fiscal policy
D) stagflation of the 1970s; government policy

Question

Quizplus · Accepted Answer

The use of the U.S. federal budget to help stabilize the economy grew in reaction to the Great Depression of the 1930s and is known as fiscal policy. Monetary policy refers to the actions taken by a central bank, such as the Federal Reserve, to control the money supply and interest rates. Stagflation, which is a combination of stagnant economic growth and high inflation, was a problem in the 1970s but was not the impetus for the use of the federal budget as a tool of economic stabilization.

The Use of the U