3. USAEO Macroeconomics
Fiscal Policy — Quiz
Test your understanding of fiscal policy with 5 practice questions.
Practice Questions
Question 1
What is the primary goal of expansionary fiscal policy?
Question 2
Which of the following is an example of an automatic stabilizer in fiscal policy?
Question 3
If the government increases spending by $100 billion and the marginal propensity to consume (MPC) is 0.8, what is the total change in GDP according to the simple spending multiplier?
Question 4
Which of the following best describes the crowding-out effect in fiscal policy?
Question 5
Suppose the economy is experiencing a budget deficit. Which of the following is a potential consequence of persistent budget deficits?