The table below shows the full-employment budget deficit as a percentage of GDP over a five-year period.
Refer to the above information.In which year was fiscal policy expansionary?

Question

The table below shows the full-employment budget deficit as a percentage of GDP over a five-year period. 
Refer to the above information.In which year was fiscal policy expansionary?

Quizplus · Accepted Answer

Fiscal policy is expansionary when the full-employment budget deficit as a percentage of GDP is increasing. In this case, the percentage increases from 1.5% in Year 2 to 2.5% in Year 3, indicating an expansionary fiscal policy in Year 3.

The Table Below Shows the Full-Employment Budget Deficit as a Percentage