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Fiscal Policy Phenomena Quiz

Authored by Orlando Perrotta

Social Studies

12th Grade

Used 3+ times

Fiscal Policy Phenomena Quiz
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15 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The government hires 2000 workers for new infrastructure projects. Over half of the newly hired construction workers, however, were employed in other sectors of the economy and quit their jobs to take this better paying opportunity. Identify what type of fiscal policy phenomenon is being described.

Fiscal multiplier.

Crowding out.

Contractionary fiscal policy.

Expansionary fiscal policy.

a and c only.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The government increases taxes on corporations. Identify what type of fiscal policy phenomenon is being described.

Fiscal multiplier.

Crowding out.

a and c only.

Expansionary fiscal policy.

Contractionary fiscal policy.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

During a recession, the government increases spending by $300B, which in turn increases GDP by $350B. Identify what type of fiscal policy phenomenon is being described.

a and d only.

Contractionary fiscal policy.

Crowding out.

Fiscal multiplier.

Expansionary fiscal policy.

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

During a recession, the government sends $500 checks to every American family. 70% of American families save the money or use it to pay off their debt. Identify what type of fiscal policy phenomenon is being described.

Contractionary fiscal policy.

Fiscal multiplier.

Crowding out.

Expansionary fiscal policy.

a and c only.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

Suppose a change in fiscal policy causes the AD curve to shift from AD(1) to AD(2) as shown above. Which response below would most likely cause that shift?

A rise in taxes OR a rise in government spending

A rise in taxes OR a fall in government spending

A fall in taxes OR a rise in government spending

A fall in taxes OR a fall in government spending

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose there is a negative oil shock and oil prices dramatically increase. What has happened?

The aggregate demand curve shifts right.

The aggregate demand curve shifts left.

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When the central bank contracts the money supply in response to expansionary fiscal policy, this is known as:

A monetary offset.

Ricardian equivalence.

Contractionary fiscal policy.

The fiscal multiplier.

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