Fiscal Policy Moved Toward Expansion During the 1980s but Toward

question 51

Multiple Choice

Fiscal policy moved toward expansion during the 1980s but toward restriction during the 1990s. How did these differences affect the economy?

• A)The expansionary fiscal policy of the 1980s led to strong growth while the restrictive policy of the 1990s led to stagnation.
• B)The expansionary fiscal policy of the 1980s led to weaker growth than the restrictive policy of the 1990s.
• C)The expansionary fiscal policy of the 1980s generated more rapid growth than the restrictive policy of the 1990s.
• D)There is little evidence that the differences in fiscal policy between the two decades exerted much impact on either aggregate demand or real output.