$$\begin{array} { | c | c | }
\hline \text { Year } & \text { Deficit it as a \% of GDP } \
\hline 1 & 1.5 \% \
\hline 2 & 1.4 \
\hline 3 & 2.0 \
\hline 4 & 1.8 \
\hline 5 & 1.5 \
\hline
\end{array}$$ The accompanying table shows the cyclically adjusted budget de?cit as a percentage of GDP over a ?ve-year period. In which year was ?scal policy turning more expansionary?
A) Year 2
B) Year 3
C) Year 4
D) Year 5

Question

$$\begin{array} { | c | c | } 
\hline \text { Year } & \text { Deficit it as a \% of GDP } \
\hline 1 & 1.5 \% \
\hline 2 & 1.4 \
\hline 3 & 2.0 \
\hline 4 & 1.8 \
\hline 5 & 1.5 \
\hline
\end{array}$$ The accompanying table shows the cyclically adjusted budget de?cit as a percentage of GDP over a ?ve-year period. In which year was ?scal policy turning more expansionary?
A) Year 2
B) Year 3
C) Year 4
D) Year 5

Quizplus · Accepted Answer

Fiscal policy is expansionary when the government spends more than it receives in revenue, causing the deficit to increase. Looking at the table, we can see that the deficit as a percentage of GDP increases from Year 2 (1.4%) to Year 3 (2.0%), indicating that fiscal policy was turning more expansionary in Year 3.

The Accompanying Table Shows the Cyclically Adjusted Budget De?cit as