AP Macroeconomics Practice Test: Fiscal Policy, Economic Growth, and Productivity

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Question 6 questions

Time 7 minutes

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1. Which of the following would not be an example of contractionary fiscal policy?

2. In a long period of economic expansion the tax revenue collected ____ and the amount spent on welfare programs ____, creating a budget ____ .

3. The crowding-out effect from government borrowing is best described as

4. Which of the following fiscal policies is likely to be most effective when the economy is experiencing an inflationary gap?

5. Which of the following would likely slow a nation's economic growth?

6. The U.S. economy currently suffers a recessionary gap, and a budget deficit exists. If the government wishes to fix the recession, which of the following choices best describes the appropriate fiscal policy, the impact on the market for loanable funds, the interest rate, and the market for the U.S. dollar?

FISCAL POLICY     LOANABLE FUNDS     INTEREST RATE     MARKET FOR $