Did the Fiscal Policy of the 1930s Bring an End

question 139

Multiple Choice

Did the fiscal policy of the 1930s bring an end to the Great Depression?

• A) No, government spending and budget deficits as a share of GDP were relatively small during the 1930s, and there is little evidence that fiscal policy did much to stimulate output.
• B) No, even though budget deficits steadily rose from 2 percent of GDP in the early 1930s to more than 10 percent of GDP in 1939, this expansionary fiscal policy had little effect on output.
• C) Yes, even though the spending programs of the New Deal led to budget deficits, they also led to a steady reduction in the rate of unemployment during the latter half of the 1930s.
• D) Yes, the fiscal policy that kept the federal budget balanced throughout the 1930s created a stable business climate and eventually stimulated investment.

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Definitions:

Holder in Due Course

A legal term referring to a person who has received a negotiable instrument in good faith and for value, enjoying certain protections against defects in the instrument and prior claims.

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specific future date.

Good Faith

Good faith refers to an honest intention to act without taking an unfair advantage over another party, often used to denote sincerity in negotiations or in fulfilling contractual obligations.

Failure of the Forklift

Failure of the forklift refers to the breakdown or malfunctioning of a forklift vehicle, which can impact operations, primarily in warehousing and logistics.