The great failure of activist fiscal policy in the 1960s was its
A)timidity in the face of persistent stagnation.
B)over-reliance on tax cuts to the exclusion of government spending programs.
C)delay in reversing course as the economy became overstimulated.
D)limited role as an accommodator of an activist monetary policy.

Question

Quizplus · Accepted Answer

The great failure of activist fiscal policy in the 1960s was its delay in reversing course as the economy became overstimulated. The government continued to stimulate the economy through increased spending and tax cuts even as inflationary pressures built up, leading to economic instability and ultimately a recession.

The Great Failure of Activist Fiscal Policy in the 1960s