Contractionary Fiscal Policy and Aggregate Demand

Instructions:

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question 1 of 3

Contractionary fiscal policy is used to offset which of the following?

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1. How should fiscal policy be used in an inflationary economy?

2. What is the appropriate contractionary fiscal policy response when inflation goes from a 3% to 10% annual rate and real GDP rises from 2% to 10%?

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About This Quiz & Worksheet

This quiz/worksheet combo can help gauge your knowledge of fiscal policy and the features of aggregate demand. Terms you will need to know to pass the quiz include contractual fiscal policy and inflationary gap.

Quiz & Worksheet Goals

These assessment tools can help you:

  • Define aggregate demand
  • Explain the features of contractionary fiscal policy
  • Find patterns in government spending
  • Identify principles of Real GDP

Skills Practiced

This quiz and worksheet can help students practice the following skills:

  • Problem solving - use acquired knowledge to solve economic practice problems
  • Information recall - access the knowledge you have gained regarding contractionary fiscal policy
  • Reading comprehension - ensure that you grasp the most important information from the related aggregate demand lesson

Additional Learning

There is also a lesson related to this quiz. The lesson is called Contractionary Fiscal Policy and Aggregate Demand. It has the following topics:

  • Definition of aggregate demand
  • Explore the expansionary gap
  • Contractionary fiscal policy
  • How fiscal policy is used in an inflationary economy
  • Purpose of contractionary fiscal policy
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