Exam 33: Budget Deficits in the Short and Long Run

The United States need never pay off the national debt; it can simply refinance the debt when it comes due.The flaw in thinking that the government must pay it off is based on the fallacy of

Which of the following statements is incorrect?

A budget deficit will be most inflationary if the aggregate

In 2010 and 2011, many observers were worried that the

Crowding out occurs when

During the period from 1945 to 1975, the debt to GDP ratio

If you wanted to measure changes in fiscal policy intentions, you should use the

In 2010, which of the following was true regarding the extremely large deficits that the U.S.recently encountered?

Figure 16-3 -Figure 16-3 shows the impact of deficit spending and the corresponding economic expansion on the demand curve for money.If the Federal Reserve does not want interest rates to rise, it will

Figure 16-2 -Assume that a contractionary monetary policy has shifted the aggregate demand curve in Figure 16-2 from D₀D₀ to D₁D₁.Fiscal authorities who wish to restore real GDP to the full-employment level will

The Federal Reserve may choose to monetize the debt in order to

The argument that the national debt imposes a burden on future generations becomes more compelling as

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

Inflation accounting for the debt argues the following:

Many economists believe that if fiscal policy turns contractionary to reduce the deficit,

The budget deficit

The main reason that the deficit grows in a recession is that

A serious burden of a budget deficit and an increase in the national debt comes on the supply side because large budget deficits

Economists who argue in favor of rapid deficit reduction claim that deficit reduction will

In 2008 and 2009, the budget deficit increased substantially because of