Exam 16: Budget Deficits In The Short and Long Run

In 2010 and 2011,President Obama advocated deficit reduction through decreased spending while Republicans in Congress advocated increased taxation to achieve the same goal.

A recessionary gap causes national debt to increase because

Which of the following statements is incorrect?

Proponents of deficit reduction argue that the principal effect will be an

When will the difference between the actual deficit and the structural deficit be the largest?

The U.S.government need never default on its debt because

Debt is to deficit as

The crowding-in effect depends on the sensitivity of investment to

A deficit will burden future generations

With no change in fiscal policy,the budget

The central bank is said to monetize the deficit when it

The structural deficit is determined by established expenditure-transfer policies and tax rates and is independent of the current level of GDP.

In the short run,the dominant effect of deficit reduction causes an

Explain why the portion of the national debt owed to foreigners is a serious matter,whereas the portion owed to U.S.citizens is of less concern.Why does the U.S.national debt pose less of a problem than the debts of Greece in 2010?

The primary conclusion of using inflation accounting is that inflation

Is the national debt a burden to future generations?

If the economy suffers a recession for reasons unrelated to fiscal policy,the deficit should rise and

If the Fed is increasing its holdings of government bonds at the same time the federal deficit is increasing,

Suppose that the economy is currently at full employment.All other things being equal,if the government implements expansionary fiscal policy,then the appropriate monetary policy is

Until about 1983,almost all of the U.S.national debt stemmed from