lectur3-page8 - Spending as a percent of GDP then increased...

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The chart above illustrates federal government spending as a percent of gross domestic product over time. Since 1991, the government spending as a percent of GDP had been decreasing until 2000. During the early 1980’s, spending as a percent of GDP increased to 23.5% of GDP as military spending under the Reagan Administration increased to win the Cold War with the former Soviet Union. Spending as a percent of GDP then decreased from 1985 until the fall of the Berlin Wall in November, 1989 marking the end of the Cold War.
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Unformatted text preview: Spending as a percent of GDP then increased from 1990 to 1992 in response to the first Persian Gulf War and a mild recession in 1990-91. Then spending as a percent of GDP decreased from 1991 to 2000, the great economic expansion of the U.S. economy. Then, the world changed on September 11, 2001 and government spending as a percent of GDP began to increase in response to the 2001 recession, as well as wars in Afghanistan and Iraq that are still ongoing as well as wars in Afghanistan and Iraq that are still ongoing. 8...
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