Exam 33: Budget Deficits in the Short and Long Run

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

The federal budget deficit in 2009 was more than eight times larger than the deficit in 2007.

If in fiscal year 2010, the federal government receives $2.2 trillion in revenues and spends $3.5 trillion for goods and services, the national debt will

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?

From 2004 to 2008, the federal budget deficit, on an official fiscal-year basis was

When (if at all) are budget deficits inflationary?

In 2009, the Social Security System ran a surplus of approximately $137 billion.

The crowding-out effect is more likely to dominate the crowding-in effect when investment is relatively

If the economy is in a recessionary gap, and the government attempts to balance the budget, the effect will be to

Deficit spending will not cause much inflation if the economy is operating near full employment.

Most economists agree that the focus of fiscal policy is to

In 2010, the net national debt was about $9 trillion or approximately $29,000 per person.

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

If deficit spending causes an increase in economic activity, it may "crowd in" some potential investment spending.

As GDP falls, automatic stabilizers run the federal budget in a deficit direction.

Give some arguments for and against a balanced budget requirement.

The appropriate fiscal policy stance depends, at least partly, on the

Both Social Security expenditures and the payroll tax receipts that finance them are treated as off-budget items.

A chart of the ratio of national debt to GDP from 1915 to 2010 would show

The net national debt is smaller than the gross national debt because