B321_MA11_Activity 5a_Pop Quiz

Which one of the following is not a tool of fiscal policy?

• Government expenditure

• Income taxes

• Interest rates

• Corporate taxes

If a country is experiencing a recession, it should __________________.

• adopt an expansionary fiscal policy

• adopt a contractionary fiscal policy

• not adopt any policy at all and remain in a recession

Identify the specific type of fiscal policy for each of the following:

An increase in defense spending ___________________

• Expansionary Fiscal Policy

• Contractionary Fiscal Policy

A rise in the goods and services tax _________________

• Expansionary Fiscal Policy

• Contractionary Fiscal Policy

A decrease in healthcare spending__________________

• Expansionary Fiscal Policy

• Contractionary Fiscal Policy

A decrease in income tax rates_____________________

• Expansionary Fiscal Policy

• Contractionary Fiscal Policy