Fiscal Policy Practice

Front

An Increase in government spending will likely have what effect on GDP?

Back

GDP will increase

Front

A decrease in government spending will likely have what effect on GDP?

Back

GDP will decrease

Front

An increase in taxes will likely have what effect on GDP?

Back

GDP will decrease

Front

A decrease in taxes will likely have what effect on GDP?

Back

GDP will increase

Front

What combination of fiscal policies would create the greatest increase in GDP? Options: Tax decrease, Government Spending increase, Tax increase, Government Spending Increase, Tax decrease, Government spending decrease, Tax Increase, government spending decrease

Back

Tax decrease, Government Spending increase

Front

What combination of fiscal policy actions would have the greatest contraction of GDP? Tax Increase, Government spending decrease

Back

Tax Increase, Government spending decrease

Front

Contractionary Fiscal Policy would most likely be used during which economic circumstance? A long period of high growth, A long period of slow growth, During a recession, Contactionary policy should never be used

Back

A long period of high growth

Front

Expansionary fiscal policy would be used during which of the following economic circumstances? During a recession, During a long period of high growth, During a long period of slow steady growth, Expansionary fiscal policy should never be used

Back

During a recession

Front

What effect does higher taxes have on consumers?

Back

consumers spend less