Exam 16: Budget Deficits in the Short and Long Run

Deficits are created by governments running a large debt.

When (if at all)are budget deficits inflationary?

In comparing the changes in actual budget surplus and the structural surplus between 1993 and 1999,it is clear that the

Analogies between public and private debt are usually misleading.

In contrast to the on-budget deficit,the off-budget deficit in 2009 was

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

The crowding-in effect depends on the fact that often a decrease in taxes causes a(n)

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

To correct the budget deficit for inflation,we should

The short-run effects of government's financial rescue program and fiscal stimulus package helped the economy increase aggregate demand curing the Great Recession.

Like many families,the national debt in 2010 was many times larger than the national income.

What is "crowding-in" effect? Explain the factors which determine the strength of the crowding in effect.

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

In 2010,many politicians argued that the deficit should be reduced at all costs but many economists countered that deficit reduction would be problematic given the state of the economy.

Which of the following is expected to increase aggregate demand in the short run?

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

A federal budget deficit places a genuine burden on future generations when the

Expansionary fiscal policy normally lowers interest rates.

Figure 16-2 -Suppose that Figure 16-2 shows the effects of reducing the budget deficit by raising taxes.If authorities do not want real GDP to fall,monetary policy must

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