Fiscal Policy Practice

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

• GDP will increase

• GDP will Decrease

• GDP will remain the same

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

• GDP will increase

• GDP will decrease

• GDP will remain unchanged

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

• GDP will increase

• GDP will decrease

• GDP will remain unchanged

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

• GDP will increase

• GDP will decrease

• GDP will remain unchanged

What combination of fiscal policies would create the greatest increase in GDP?

• Tax decrease,

  Government Spending increase

• Tax increase,

  Government Spending Increase

• Tax decrease,

  Government spending decrease

• Tax Increase, government spending decrease

What combination of fiscal policy actions would have the greatest contraction of GDP?

• Tax Increase.

  Government spending decrease

• Tax Increase,

  Government Spending Increase

• Tax Decrease, Government spending increase

• Tax Decrease,

  Government Spending decrease

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

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

What do we use Gross Domestic Product (GDP) to measure? Check all that apply

• economic output

• economic growth

• how many sales take place during a year

• The health of a nations economy

What effect does higher taxes have on consumers?

• consumers spend more

• consumers spend less

• consumer spending isnt efected

• consumers save more money