President Dwight Eisenhower held office from January 1953 to January 1961. The Eisenhower Administration increased government expenditure significantly by signing into law the Federal-Aid Highway Act of 1956. The bill, considered “the greatest public works project in history”, authorized the funding to construct and repair approximately 41,000 miles of highways, freeways, roads, and bridges. During Eisenhower's two terms, the U.S. economy experienced a few recessions: the Recession of 1953 (July 1953-May 1954) and the Recession of 1958 (August 1957-April 1958). 1.Classify the Eisenhower Administration's increase in government expenditure in 1956. A. discretionary fiscal policy and expansionary B. automatic stabilizer and expansionary C. monetary policy and expansionary D. not classified as fiscal policy, but would expand the economy 2.During the mid-1950s, the marginal propensity to consume (MPC). is estimated to be 0.75. Assume the price level is fixed and saving is the only leakage. How much would real GDP change by if the Federal-Highway Act of 1956 cost $25 billion. A. -$100 billion B. $100 billion C. $75 billion D. -$75 billion 3.True, False, or Uncertain: An increase in government spending will, ceteris paribus, result in a larger real GDP with a fixed price level compared to inflationary pressure. A. True. B. False. C. Uncertain. 4.During the Recession of 1953 the U.S. actual deficit decreased. As a result, the cyclical deficit ________ and the structural deficit ________. A. decreased; decreased B. decreased; increased C. increased; decreased D. increased; increased