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Federal government spending has grown quickly since 2007 primarily because of: i

ID: 1210796 • Letter: F

Question

Federal government spending has grown quickly since 2007 primarily because of:

increased spending on the U.S. education system.

expansionary fiscal policy in response to the Great Recession (2008 - 2009).

increased foreign aid to disaster-stricken areas.

the interest owed by the government on the large bailout payments made to big banks.

increased spending on bridge and road infrastructure.

A.

increased spending on the U.S. education system.

B.

expansionary fiscal policy in response to the Great Recession (2008 - 2009).

C.

increased foreign aid to disaster-stricken areas.

D.

the interest owed by the government on the large bailout payments made to big banks.

E.

increased spending on bridge and road infrastructure.

Explanation / Answer

expansionary fiscal policy in response to the Great Recession (2008 - 2009).

Recession led to decrease in all economic parameters like employment, income, profits, investment etc. So government needs to increase money supply via expansionary fiscal policy to deal with recession.

B.

expansionary fiscal policy in response to the Great Recession (2008 - 2009).

Recession led to decrease in all economic parameters like employment, income, profits, investment etc. So government needs to increase money supply via expansionary fiscal policy to deal with recession.