$$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Actual Budget Deficit (-) or } \
\text { Surplus (+) }
\end{array} & \begin{array} { c }
\text { Cyclically Adjusted Deficit (-) or Surplus } \
( + )
\end{array} \
\hline 1 & + 1.4 \% & + 0.1 \% \
\hline 2 & + 2.5 & + 1.1 \
\hline 3 & + 1.3 & + 1.1 \
\hline 4 & - 1.5 & - 1.1 \
\hline 5 & - 3.4 & - 2.7 \
\hline 6 & - 3.5 & - 2.4 \
\hline 7 & - 2.6 & - 1.8 \
\hline 8 & - 1.9 & - 1.8 \
\hline 9 & - 1.3 & - 1.4 \
\hline
\end{array}$$ Refer to the data in the table. The direction of ?scal policy became more expansionary from
A) Year 1 to 2.
B) Year 6 to 7.
C) Year 4 to 5.
D) Year 5 to 6.

Question

$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Actual Budget Deficit (-) or } \
\text { Surplus (+) }
\end{array} & \begin{array} { c } 
\text { Cyclically Adjusted Deficit (-) or Surplus } \
( + )
\end{array} \
\hline 1 & + 1.4 \% & + 0.1 \% \
\hline 2 & + 2.5 & + 1.1 \
\hline 3 & + 1.3 & + 1.1 \
\hline 4 & - 1.5 & - 1.1 \
\hline 5 & - 3.4 & - 2.7 \
\hline 6 & - 3.5 & - 2.4 \
\hline 7 & - 2.6 & - 1.8 \
\hline 8 & - 1.9 & - 1.8 \
\hline 9 & - 1.3 & - 1.4 \
\hline
\end{array}$$ Refer to the data in the table. The direction of ?scal policy became more expansionary from
A) Year 1 to 2.
B) Year 6 to 7.
C) Year 4 to 5.
D) Year 5 to 6.

Quizplus · Accepted Answer

Fiscal policy is more expansionary when the cyclically adjusted deficit increases or the surplus decreases. From Year 4 to 5, the cyclically adjusted deficit increased from -1.1% to -2.7%, indicating a more expansionary fiscal policy.

Refer to the Data in the Table