Scenario 1 The President and Congressional leaders are currently looking over economic data to decide the appropriate
fiscal policy for the upcoming year. Their goal is a 3% average GDP growth rate and an unemployment rate to
be below 4%. Current economic indicators are showing that the economy is experiencing an average GDP
growth rate of 2% and an unemployment rate of 5.5%.
1. Based on the current economic indicators, which fiscal policy tools should the government use to reach
their economic goals?
A. Raise taxes and decrease spending
B. Raise taxes and increase spending
C. Cut taxes and decrease spending
D. Cut taxes and increase spending
2. In 3-4 sentences use evidence from the text to justify and explain your answer.