In the early 2000s, the George Bush administration passed a series of tax cuts and spending increases to fight a recession. This combination of policies most likely:
A)increased the U.S. trade deficit.
B)decreased the U.S. trade deficit.
C)had no effect on the trade deficit.
D)had an unpredictable effect on the trade deficit.

Question

Quizplus · Accepted Answer

The tax cuts and spending increases by the George Bush administration would have increased domestic consumption and investment, leading to higher imports. This, in turn, would likely increase the U.S. trade deficit as the country would be buying more from abroad than it was selling.

In the Early 2000s, the George Bush Administration Passed a Series