Edmentum Econ - Unit 3 - Lesson 5

Contractionary fiscal policy results in a budget ____________.

• defecit

• surplus

Expansionary fiscal policy results in a budget ______________.

• deficit

• surplus

In which situation might a government use contractionary fiscal policy?

• When unemployment is high

• When economic production is slowing down

• When the inflation rate is high

• When prices are stable

Which of the following is an example of expansionary fiscal policy?

• Increased spending on infrastructure

• An increase in taxes

• A decrease in government spending on social programs

• Increased international trade

Minimum wage is an example of a ________________

Rent control is an example of a _________________

Price floors tend to create a ___________________.

• surplus

• shortage

Price ceilings tend to create a ______________.

• surplus

• shortage

This chart shows an example of a _________________

• price floor

• price ceiling

How does the government raise money for large stimulus packages (expansionary fiscal policy)?