Exam 16: Budget Deficits in the Short and Long Run

It is most likely that the federal government will never actually pay off the national debt.

By 2007 the deficit

The deficit can be defined in simple terms as

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

A budget deficit is best defined as the

Inflation accounting for the debt argues the following:

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

The decisions on the part of the government to increase spending by $5 billion will have the largest impact on aggregate demand when the spending is financed by the sale of bonds to

Crowding out occurs when

If the economy is in an inflationary gap,which of the following is the least appropriate policy mix?

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

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

The government should not attempt to balance the budget if

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

Contractionary fiscal policies used to reduce the deficit in the 1990s did not hurt the economy because fiscal and monetary policies were well coordinated at that time.

National debt is likely to fall when

If the inflation rate falls,what will happen to the budget deficit?

The Fed and the government are working against each other if,as the government cuts taxes to promote economic growth,the Fed

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

A deficit will burden future generations