Exam 16: Budget Deficits in the Short and Long Run

The actual deficit is a poor measure of the government fiscal policy because it changes independently of intentional government policies.

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

Monetizing the debt is a way of turning debt into money and reducing the burden of the debt.

Lately,the ratio of debt to GDP has been

Debt is to deficit as

In 2010 and 2011,many observers were worried that the

Under a balanced budget policy,a sharp rise in GDP will cause

At levels of GDP above full employment,the federal budget would usually be in a deficit position.

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

During the late 1980s and early 1990s,most of the budget deficits were accounted for by

In the late 1990s,the more than expected increases in tax revenues were the result of

The national debt

Because the personal income tax is an automatic stabilizer,

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

Crowding out can best be defined as

If a balanced budget were required in 2008,the government would have been required to cut spending and increase taxes.

Until about 1983,almost all of the U.S.national debt stemmed from

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 purpose of fiscal policy should be to

Define the following terms and explain their importance to the study of macroeconomics: a.structural budget deficit b.monetize the deficit c.crowding out d.inflation accounting e.mix of fiscal and monetary policy