6
QuizMultiple Choice

The Obama Presidency

Question 6 • Learning Lab - US History B-CR (26-27)

A negative effect of the American Recovery and Reinvestment Act was that

Answer
A
the federal deficit grew.
B
many more business failed.
C
state governments lost funding.
D
the gross domestic product dropped.

Explanation

The American Recovery and Reinvestment Act funded tax cuts, aid to states, and public projects to help the economy recover from the recession. Because the federal government spent more and collected less revenue through tax cuts, the federal deficit grew. The act was intended to support businesses and increase economic activity, so business failures and a falling GDP were not its negative effects.

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