Exam 15: Sustained Budget Deficits: Is This Any Way to Run a Government

An increase in the United States budget deficit will:

Which of the following is the most important factor to address in order to reduce the fiscal imbalance:

A budget deficit refers to:

Financing government spending by issuing money will cause higher interest rates.

An actual deficit is the deficit that would occur if the economy were at full employment.

Which of the following is unlikely to occur as a result of a sustained budget deficit?

Which of the following is most likely to be harmed by a large national debt?

During boom times a tendency exists for the deficit to increase because governments tend to expand programs when the economy is in the expansionary phase of the business cycle.

Suppose that in an attempt to increase employment, the government increases spending and runs a deficit. As a result of this deficit there is an increase in interest rates. This deficit was most likely financed by:

Which of the following statements is not correct?

That portion of the national debt held by foreigners represents a burden in the form of fewer goods and services for domestic citizens.

The Federal budget is a statement of receipts and outlays for a year.

If receipts exceed outlays there is a budget deficit.

Indexing the alternative minimum tax to inflation will have increase the forecasted deficit.

Financing a budget deficit by issuing money will:

It is projected that the public debt will:

Funds available for borrowing by other households and firms and by the government are:

Investment funds are provided by:

Use the following diagram to answer the following questions. -Refer to Loanable Funds. A shift in financing of the federal budget deficit away from public debt to internal financing would most likely:

In which instance would it be most desirable for government to borrow?