The Kennedy cuts were meant to have a demand-side effect through an increase in disposable income. Increases in spending would increase demand for output and employment would rise. In effect, if the aggregate supply curve shifts to the right, output and employment will rise and inflation will decline. 2. increase military spending which more than offset the social spending cuts.
Huge deficits create a Keynesian demand-side effect.
Humphrey-Hawkens Bill sets unemployment goal of 4 percent. Fed Chairman Paul Volcker stabilizes growth of money supply 2. Reagan benefits from the recession underway when he takes office. The exam will consist of a few questions about the policy settings during the 1978 to 1985 period, their intended result and their actual result. The exam should take no longer than 30 minutes.