In Which of the Following Situations Is a Budget Surplus

question 140

Multiple Choice

In which of the following situations is a budget surplus most likely to occur?

• A)When fiscal policy is expansionary
• B)When the economy is contracting
• C)When fiscal policy is expansionary and the economy is contracting
• D)When fiscal policy is contractionary and the economy is expanding

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Definitions:

Phillips, Hager & North

A Canadian investment management firm, known for its mutual funds and portfolio management services.

Canadian Equity Fund

An investment fund that concentrates on equities (stocks) based in Canada.

Escalating Rate GIC

A Guaranteed Investment Certificate (GIC) where the interest rate increases at set intervals over the term of the investment.

Compounded Annually

A method of calculating interest where the interest is added to the principal at the end of each year, leading to compound growth.