The accepted philosophy on U.S.federal deficits prior to the Great Depression was that:
A)the budget should be balanced cyclically.
B)a budget deficit does not matter as long as the economy is at full employment.
C)the budget should be annually balanced.
D)deficits dampen aggregate demand in the short run and reduce the federal debt.
E)spending decreases during expansions and increases during recessions.

Question

Quizplus · Accepted Answer

Prior to the Great Depression, the accepted philosophy was that the budget should be annually balanced, meaning that government expenditures should not exceed government revenue in any given year. This was thought to promote fiscal responsibility and prevent the accumulation of debt.

The Accepted Philosophy on U