AMERICAN IMPERIALISM 1890 1919
THE UNITED STATES IN WORLD WAR I
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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balance the Federal budget
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slow down the rate of inflation
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slow down the rise in interest rates
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increase consumer spending and stimulate the economy
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Detailed explanation-1: -Expansionary Policy and Tools The government might issue tax stimulus rebates to increase aggregate demand and fuel economic growth. The logic behind this approach is that when people pay lower taxes, they have more money to spend or invest, which fuels higher demand.
Detailed explanation-2: -The war brought full employment and a fairer distribution of income. Blacks and women entered the workforce for the first time. Wages increased; so did savings. The war brought the consolidation of union strength and far-reaching changes in agricultural life.
Detailed explanation-3: -If the government uses expansionary policy and reduces tax rates and increases its spending on goods and services, it will likely result in extra income and spending in the economy. Expansionary fiscal policy is controversial, however, because it is likely to increase the level of government debt.
Detailed explanation-4: -In general, tax cuts boost the economy by putting more money into circulation. They also increase the deficit if they aren’t offset by spending cuts. As a result, tax cuts improve the economy in the short-term, but, if they lead to an increase in the federal debt, they will depress the economy in the long-term.