Which of the following contributed the most to the economic stability and strong growth of real GDP during the 1980s and 1990s?
A) the rapid growth of government expenditures throughout most of the period
B) congressional policies that persistently balance the budget
C) modifications in fiscal policy that stimulated aggregate demand during economic slowdowns and restrained it during periods of economic boom
D) Federal Reserve policies that kept the inflation rate low and relatively stable

Question

Quizplus · Accepted Answer

Federal Reserve policies that kept the inflation rate low and relatively stable contributed the most to the economic stability and strong growth of real GDP during the 1980s and 1990s. This allowed for confidence in long-term investments and kept borrowing costs low, leading to increased private investment, job growth, and economic expansion. The other options, such as rapid growth of government expenditures and modifications in fiscal policy, may have had short term impacts but were not sustainable in the long run. Congressional policies that balanced the budget may have had a positive impact but were not consistently implemented throughout the period.

Which of the Following Contributed the Most to the Economic