Dual Credit US History (DCUSH) Semester 2 Practice Test

Fiscal policy and relief spending during the New Deal. In 1937, Roosevelt faced pressure to balance the budget and curb deficits, so he trimmed relief programs and reduced deficit spending instead of continuing heavy New Deal expenditures. That move pulled federal money out of the economy just as recovery momentum was building, leading to a sharp slowdown and higher unemployment—the so-called Roosevelt Recession of 1937–38. This shows how cutting funds for public works and relief can dampen demand and slow recovery, which is why the option describing cutting relief funding and decreasing deficit spending best fits what happened.

The other options don’t match the historical moment: the gold standard had already been abandoned earlier in the decade, so maintaining it wouldn’t capture the 1937 policy shift; easing credit by making borrowing easier isn’t what Roosevelt did in 1937; and increasing funding for relief projects ran contrary to the austerity move that precipitated the downturn.