What Prompted the Large Increase in Tax Rates in 1932

question 79

Multiple Choice

What prompted the large increase in tax rates in 1932 in the midst of an economic recession?

• A) concern that inflation would rise due to increases in real output and aggregate demand
• B) expansionary fiscal policy designed to stimulate aggregate demand
• C) the Keynesian view that taxes should be increased during a recession
• D) the view that the federal government should maintain a balanced budget

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Definitions:

Experiencing Depression

Undergoing or living through the symptoms of depression, characterized by a prolonged period of sadness, hopelessness, or lack of interest in life.

Type A

A personality type characterized by high stress levels, impatience, and a competitive drive, often linked to a higher risk of heart disease.

Type B

Describes individuals who are generally relaxed, less competitive than their Type A counterparts, and more resistant to stress.

Inherited Trait

Refers to characteristics or attributes that are passed from parents to offspring through their genes.