Fiscal Policy + Business Cycle

What phase of the business cycle do we expect real GDP to be at its highest and unemployment at its lowest?

• peak

• trough

• expansion

• contraction

What phase of the business cycle we do we expect real GDP to be at its lowest and unemployment at its highest?

• peak

• trough

• expansion

• contraction

Where on the business cycle is real GDP increasing and unemployment decreasing?

• Peak

• trough

• contraction

• expansion

Where on the business cycle is real GDP decreasing and unemployment increasing?

• peak

• trough

• expansion

• contraction

What are the two fiscal policy tools of the federal government? Select two choices.

• Government spending

• Taxes

• Monetary policy

• International trade

What would the government do to move out of a recession? Two options are correct.

• Increase government spending

• Decrease government spending

• Increase taxes

• Decrease taxes

What would a government do to decrease inflation during an expansionary period?

• Increase government spending

• Decrease government spending

• Increase taxes

• Decrease taxes

What type of fiscal policy is generally more popular with voters?

• Expansionary fiscal policy

• Contractionary fiscal policy

What is another word for the expansion period?

What is another word for the contraction period?