Author Question: Making how much decisions involves A) calculating the total costs of the activity and determining ... (Read 48 times)

cookcarl · **on:** Jun 29, 2018

Making how much decisions involves

A) calculating the total costs of the activity and determining if you can afford to incur that expenditure.
B) calculating the total benefits of the activity and determining if you are satisfied with that amount.
C) determining the additional benefits and the additional costs of that activity.
D) calculating the average benefit and the average cost of an activity to determine if it is worthwhile undertaking that activity.

Question 2

The federal budget was in deficit from 1931 to 1939, except in the year 1937. Given this fact, how do you explain E.

Cary Brown's statement, Fiscal policy, then, seems to have been an unsuccessful recovery device in the 'thirties-not because it did not work, but because it was not tried.

frejo · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

Economist E. Cary Brown is arguing that while the actual federal budget was mainly in deficit during the Great Depression, the cyclically adjusted federal budget was in surplus, except for one year. Cyclically adjusting the budget calculates what revenues and expenditures would have been, had the economy been producing an output equal to potential GDP. The deficits in the 'thirties were due to a precipitous decline in tax revenues, not a substantial increase in government expenditures. A substantial increase in government expenditures was needed to pull the economy out of depression, and this did not occur. As a result, one might argue that discretionary expansionary fiscal policy was not pursued during the Great Depression.