Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

Which set of conditions would be most likely to make a country’s budget deficit increase? (total GDP, unemployment, discretionary government spending)

  • Atotal GDP decreases, unemployment rises, discretionary government spending decreases
  • Btotal GDP decreases, unemployment rises, discretionary government spending no change
  • Ctotal GDP increases, unemployment falls, discretionary government spending increases
  • Dtotal GDP increases, unemployment falls, discretionary government spending no change

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