Use the following to answer questions:
-(Figure: Fiscal Policy and the End of the Great Depression)Refer to Figure: Fiscal Policy and the End of the Great Depression.The period from 1933 to 1936 would seem to indicate that in the short run a moderate level of government deficit spending can _____ the unemployment rate.
A) reduce
B) increase
C) not affect
D) eliminate

Question

Use the following to answer questions: 
-(Figure: Fiscal Policy and the End of the Great Depression)Refer to Figure: Fiscal Policy and the End of the Great Depression.The period from 1933 to 1936 would seem to indicate that in the short run a moderate level of government deficit spending can _____ the unemployment rate.
A) reduce 
B) increase 
C) not affect 
D) eliminate

Quizplus · Accepted Answer

The figure shows that during the period from 1933 to 1936, when there was moderate levels of government deficit spending, the unemployment rate decreased significantly. Therefore, choice A is the best answer as it implies that government deficit spending can reduce the unemployment rate in the short run.

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