Exam 13: Federal Budgets and Public Policy

If the fraction of U.S. government securities held by foreigners increases,

If government increased Social Security benefits and decreased the salaries of government workers by the same amount, we would expect the immediate effect to be

Large budget __________ have come from a combination of tax __________ and spending __________.

Which of the following statements about the tax cut enacted in 1981 during the Reagan administration is correct?

The evidence of the last several decades

The federal government's fiscal year

An annually balanced budget

The U.S. Social Security program

Which of the following is not a form of crowding out?

Approximately __________ of the budget falls into expenditure categories that are determined by existing law.

If the federal government budget deficit increases, then interest rates will __________, the U.S. dollar will __________, and the foreign trade deficit will __________.

Crowding out occurs because lower interest rates discourage saving and make it harder to borrow.

Which institution was created under the Employment Act of 1946 to assist the President in formulating an appropriate fiscal policy?

Discretionary expansionary fiscal policy may lead to

Because of automatic stabilizers, government budget deficits are

Approximately what percentage of the U.S. federal budget was used for interest payments (on the national debt) in 2010?

Which of the following is not true about the U.S. twin deficits?

It is possible for the budget deficit to change even if there is no change in discretionary fiscal policy.

Some economists have theorized that increases in the deficit have little or no expansionary effect because families reduce their spending by an equivalent amount in order to protect the economic security of their offspring.

Which component of aggregate expenditure is most subject to crowding out?