The Cyclically-Adjusted Deficit as a Percentage of GDP Is 2

question 103

Multiple Choice

The cyclically-adjusted deficit as a percentage of GDP is 2 percent in Year 1. This cyclically-adjusted deficit becomes 1 percent of GDP in Year 2. It can be concluded from Year 1 to Year 2 that:

• A) Fiscal policy was more expansionary
• B) Fiscal policy was more contractionary
• C) The Federal government is decreasing taxes
• D) The Federal government is increasing spending

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Definitions:

Economic Times

A term that might refer to periods classified according to prevailing economic conditions or to a newspaper focusing on economic and financial news.

Corporate Buyout

The acquisition of controlling shares in a company, often resulting in a change in management and strategy.

Blackout

A temporary loss of consciousness, electricity, or the obscuration of memory, often caused by power failures, medical conditions, or heavy drinking.

Consequences

The outcomes, effects, or results that naturally follow from an action or condition.