The Table Below Shows the Full-Employment Budget Deficit as a Percentage

question 191

Multiple Choice

The table below shows the full-employment budget deficit as a percentage of GDP over a five-year period. Refer to the above information.In which year was fiscal policy expansionary?

• A)Year 2
• B)Year 3
• C)Year 4
• D)Year 5

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Definitions:

Impairment Loss

The difference when the recorded value of an asset or a cash-producing entity surpasses the amount it can be recovered for.

Depreciable Asset

An asset that loses value over time due to wear and tear, obsolescence, or age, and for which depreciation can be applied.

Recoverable Amount

The higher of an asset’s fair value less costs of disposal and its value in use.

Cash-Generating Unit

The minimal identifiable collection of assets that produces cash flows mostly independent from those generated by other assets or collections of assets.