THE GREAT DEPRESSION 1929 1940
PRESIDENT HERBERT HOOVER AND THE GREAT DEPRESSION
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Raise taxes on the wealthy and redistribute the money to those in need
|
|
|
Provide incentives to private contractors to construct housing for the homeless
|
|
|
Increase government spending so its effects will multiply to create more spending, jobs, and growth
|
|
|
Encourage the President to give speeches to reassure the public that “Prosperity is right around the corner"
|
Detailed explanation-1: -Stabilizing the economy For example, Keynesian economists would advocate deficit spending on labor-intensive infrastructure projects to stimulate employment and stabilize wages during economic downturns. They would raise taxes to cool the economy and prevent inflation when there is abundant demand-side growth.
Detailed explanation-2: -Keynesian macroeconomics argues that the solution to a recession is expansionary fiscal policy, such as tax cuts to stimulate consumption and investment or direct increases in government spending that would shift the aggregate demand curve to the right.
Detailed explanation-3: -Keynesian economics argues that demand drives supply and that healthy economies spend or invest more than they save. To create jobs and boost consumer buying power during a recession, Keynes held that governments should increase spending, even if it means going into debt.
Detailed explanation-4: -During times of economic recession (or “bust” cycles), Keynesian Economic Theory argues that governments should increase spending on social programs in order to stimulate the job market with an influx of skilled labor.