The Result of Tax Cuts Without Corresponding Spending Cuts During

question 48

Multiple Choice

The result of tax cuts without corresponding spending cuts during President Reagan's first term was that

• A)the economy entered into the worst recession since the 1930s.
• B)the economy soared to new heights.
• C)the economy crashed to new lows.
• D)a period of stagflation occurred.
• E)everyone who wanted a job could get one.

---

Definitions:

Dividend Yield

A financial metric indicating the annual dividend payment of a company as a proportion of its stock price.

Volatility

A statistical measure of the dispersion of returns for a given security or market index, typically used as a measure of risk.

Time to Maturity

The remaining time until a financial instrument, like a bond, reaches its repayment date.

Stock Price

The cost to purchase a share of a particular company's stock, which changes based on market conditions and company performance.