50.0/140 E Problem 12-09 3 Refer to the Front Page and the figure to answer two questions 6.67/10 point warded Scored B Print Mences FRONT PAGE Fiscal Policy in the Great Depression In 1991 President Herbert Hoover burved. Business depressions have been recurrent in the life of our country and are but transitory Rather than proposing focal Ne, Hoover complained that expansion of public works programs had unbalanced the federal budget. In 1932 he proposed outbacks in government spending and higher taxes in his view the unioned balancing of the federal budget is the first necessity of national stability and is the foundation of further recovery Franklin Roosevelt shared this view of focal policy. Herticed Hoover for not balancing the budget and in 1933 warned Congress of public works must be considered from the point of view of the ability of the government ressory to pay for them As the accompanying figure shows the budget defici perusted throughout the Great Depression. But these deficits were the result of a declining economy, not stimulative fiscal policy. The structural deficit actually decreased from 1931 to 1833 gure) when fiscal restraint was pursued. This restraint reduced aggregate spending time when producers were desperate for increasing sales Only when the structural deficit was expanded tremendously by spending during World War II did few policy have a decidedly positive effect. Federal defense expenditures ned from 52.2 billion 1940 to $874 billion in 1941 Souto Bran, E. Carey Policy in the The Appraisal American Economic Revww.Deceber 1956. Table 1. The American Economic Association, 1956 3 *55.0 14.0 30 42.0 66770 Draw Structural deficie and plus +10 0 -10 BUDGET BALANCES Done speryan -20 -30 40 -50 -0.0 -20 Actual dette 1929 1930 1931 1932 1933 1904 1905 1906 1907 1930 VEAN Instructions: Enter your responses as a whole number if you are entering any negative numbers be sure to incude a negative sign- in front of those numbers a. How much fiscal restraint or stimulus occurred between 1931 and 1933 6 bilion of fiscal restraint occurred between 1931 and 1933 By how much did this policy change aggregate demand if the MPC was 0.75 162 billion 50.0/140 E Problem 12-09 3 Refer to the Front Page and the figure to answer two questions 6.67/10 point warded Scored B Print Mences FRONT PAGE Fiscal Policy in the Great Depression In 1991 President Herbert Hoover burved. Business depressions have been recurrent in the life of our country and are but transitory Rather than proposing focal Ne, Hoover complained that expansion of public works programs had unbalanced the federal budget. In 1932 he proposed outbacks in government spending and higher taxes in his view the unioned balancing of the federal budget is the first necessity of national stability and is the foundation of further recovery Franklin Roosevelt shared this view of focal policy. Herticed Hoover for not balancing the budget and in 1933 warned Congress of public works must be considered from the point of view of the ability of the government ressory to pay for them As the accompanying figure shows the budget defici perusted throughout the Great Depression. But these deficits were the result of a declining economy, not stimulative fiscal policy. The structural deficit actually decreased from 1931 to 1833 gure) when fiscal restraint was pursued. This restraint reduced aggregate spending time when producers were desperate for increasing sales Only when the structural deficit was expanded tremendously by spending during World War II did few policy have a decidedly positive effect. Federal defense expenditures ned from 52.2 billion 1940 to $874 billion in 1941 Souto Bran, E. Carey Policy in the The Appraisal American Economic Revww.Deceber 1956. Table 1. The American Economic Association, 1956 3 *55.0 14.0 30 42.0 66770 Draw Structural deficie and plus +10 0 -10 BUDGET BALANCES Done speryan -20 -30 40 -50 -0.0 -20 Actual dette 1929 1930 1931 1932 1933 1904 1905 1906 1907 1930 VEAN Instructions: Enter your responses as a whole number if you are entering any negative numbers be sure to incude a negative sign- in front of those numbers a. How much fiscal restraint or stimulus occurred between 1931 and 1933 6 bilion of fiscal restraint occurred between 1931 and 1933 By how much did this policy change aggregate demand if the MPC was 0.75 162 billion