Exam 32: Budget Deficits in the Short and Long Run

If a larger fraction of GDP is devoted to ___________, nation's capital stock will grow faster and the aggregate supply curve will shift more quickly to the right, accelerating growth.

A budget surplus is defined as the amount that the

Compared to the size of GDP in 2014, the net national debt was approximately

Analysis indicates that the economy is in a recessionary gap. Which of the following is the least appropriate policy mix in this situation?

Analysis indicates that the economy is in a recessionary gap. Which of the following is the most appropriate policy mix in this situation?

List three bogus arguments about the "burden of the debt," and point out the errors in each of the arguments.

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

A recessionary gap causes national debt to increase because

Budget deficits are even more inflationary if they are monetized.

For which of the following time periods did the United States have a budget surplus?

If the U.S. government decided to pay off the national debt by creating money, what would be the most likely effect?

The national debt is the

Budget surpluses can stimulate capital formation and spur economic growth.

The structural deficit or surplus

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

Whether or not deficits create a burden depends on how and why the government incurred the deficits in the first place. Explain.

In 2010, which of the following was true regarding the extremely large deficits that the United States recently encountered?

If crowding out occurs, the Main Burden of the debt is

Structural budget surplus is the hypothetical surplus we would have under current fiscal policies if the economy were operating near full employment.

The principal difference between conventional accounting and economic analysis of inflation is that