A Lesson the U

question 51

Multiple Choice

A lesson the U.S.might learn from the Canadian experience of the late 1990s is that

• A)it is possible to reduce government spending and the results can be positive.
• B)reductions in government spending when an economy is sluggish will lead to a disastrous outcome.
• C)budget deficits stimulate aggregate demand and reduce unemployment just as the Keynesian model implies.
• D)a country can continue to expand its debt as a share of the economy without experiencing higher interest rates.