Econ 111 Review Practice Test.
ECON 111 REVIEW PRACTICE TEST. Suppose the economy had been producing at potential GDP but now is in recession. Which of the following are discretionary fiscal policies that could bring the economy closer to potential GDP? Check all that apply. A tax hike A tax cut A reduction in government purchases Additional spending on national park facilities - CORRECT ANSWER a tax cut additional spending on national park facilities Suppose the economy had been producing at potential GDP but now is producing above it. Which of the following are discretionary fiscal policies that could bring the economy closer to potential GDP? Check all that apply. Additional spending on bridge repairs A tax cut A reduction in spending on new road construction A tax increase - CORRECT ANSWER A reduction in spending on new road construction A tax increase Suppose the economy had been producing at potential GDP but now is in recession. Which of the following are discretionary fiscal policies that could bring the economy closer to potential GDP? Check all that apply. A tax increase A reduction in spending on education Additional spending on national park facilities A tax cut - CORRECT ANSWER Additional spending on national park facilities
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