Question 1

The largest U.S.debt-to-GDP ratio occurred during the Great Depression.

Accepted Answer

A) True 
 B)False  False

Question 2

If a government has a difficult time raising funds by borrowing,it must print money,which generates inflation.

Accepted Answer

A) True 
 B)False  True

Question 3

The economic meaning of the intertemporal budget constraint is that:

Accepted Answer

A) the government's budget never has to balance. 
B) the government's budget must balance period by period. 
C) the present discounted value of the government's budget must balance. 
D) the government can always push its debt on future generations. 
E) every generation faces the same tax schedule. 
A) the government's budget never has to balance. 
B) the government's budget must balance period by period. 
C) the present discounted value of the government's budget must balance. 
D) the government can always push its debt on future generations. 
E) every generation faces the same tax schedule. C

Question 4

The country with the smallest annual government spending-to-GDP ratio is:

Accepted Answer

A) France. 
B) the United States. 
C) the United Kingdom. 
D) South Korea. 
E) Japan. 
A) France. 
B) the United States. 
C) the United Kingdom. 
D) South Korea. 
E) Japan.

Question 5

The government's intertemporal budget constraint is a simple two-period case in which:

Accepted Answer

A)    . 
B)    . 
C)    . 
D)    . 
E)    . 
A)    . 
B)    . 
C)    . 
D)    . 
E)    .

Question 6

Assume the government does not "print money." Can the government run persistent budget deficits?

Accepted Answer

Yes.By borrowing today and repaying in t

Question 7

When we discuss government expenditure,we are talking about only purchases of goods and services.

Accepted Answer

A) True 
 B)False

Question 8

The ratio of federal government spending to GDP in the United States is about:

Accepted Answer

A) 50 percent. 
B) 40 percent. 
C) 20 percent. 
D) 10 percent. 
E) 35 percent. 
A) 50 percent. 
B) 40 percent. 
C) 20 percent. 
D) 10 percent. 
E) 35 percent.

Question 9

An explanation of why governments are willing to burden future generations with debt to finance a war today is:

Accepted Answer

A) only present generations enjoy peace. 
B) future generations will enjoy peace and must pay nothing. 
C) future generations will enjoy peace and must pay something. 
D) future generations will never enjoy peace but must pay for current generations to enjoy it. 
E) current generations are more important to the government than future generations. 
A) only present generations enjoy peace. 
B) future generations will enjoy peace and must pay nothing. 
C) future generations will enjoy peace and must pay something. 
D) future generations will never enjoy peace but must pay for current generations to enjoy it. 
E) current generations are more important to the government than future generations.

Question 10

We can compensate future generations for the depletion of nonrenewable resources by increasing the stock of knowledge in the present.

Accepted Answer

A) True 
 B)False

Question 11

The sources of funds for the government are:

Accepted Answer

A) tax revenues. 
B) new borrowing. 
C) printing money. 
D) all of the above 
E) a and b only 
A) tax revenues. 
B) new borrowing. 
C) printing money. 
D) all of the above 
E) a and b only

Question 12

The national income identity can be rearranged to show that __________ equals __________.

Accepted Answer

A) Private saving + Government saving + Foreign saving;investment 
B) Private saving - Government saving + Investment;the budget deficit 
C) Private saving - Government saving - Foreign saving;investment 
D) Private saving;investment 
E) Private saving + Government saving + Foreign saving;tax revenues 
A) Private saving + Government saving + Foreign saving;investment 
B) Private saving - Government saving + Investment;the budget deficit 
C) Private saving - Government saving - Foreign saving;investment 
D) Private saving;investment 
E) Private saving + Government saving + Foreign saving;tax revenues

Question 13

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," __________,assuming current federal government spending patterns.

Accepted Answer

A) the share of government spending in GDP will climb to 40 percent by 2075 
B) the share of government spending in GDP will climb to 40 percent by 2010 
C) the share of government spending in GDP will climb to 100 percent in 2075 
D) the share of government spending in GDP will fall to 0 percent in 2075 
E) the share of government spending in GDP will not change between now and 2075 
A) the share of government spending in GDP will climb to 40 percent by 2075 
B) the share of government spending in GDP will climb to 40 percent by 2010 
C) the share of government spending in GDP will climb to 100 percent in 2075 
D) the share of government spending in GDP will fall to 0 percent in 2075 
E) the share of government spending in GDP will not change between now and 2075

Question 14

What are the largest and smallest individual federal government expenditures? Source of revenues?

Accepted Answer

• Expenditures: Largest-health

Question 15

If current generations are depleting nonrenewable resources,they must compensate future generations by:

Accepted Answer

A) investing in capital. 
B) investing in education. 
C) investing in research. 
D) doing all of the above. 
E) doing none of the above. 
A) investing in capital. 
B) investing in education. 
C) investing in research. 
D) doing all of the above. 
E) doing none of the above.

Question 16

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," the main culprit for the increase in federal government spending to about 40 percent of GDP in 2075 is (are):

Accepted Answer

A) Medicare. 
B) Medicaid. 
C) defense spending. 
D) all of the above 
E) a and b 
A) Medicare. 
B) Medicaid. 
C) defense spending. 
D) all of the above 
E) a and b

Question 17

Which of the following countries has the largest government spending-to-GDP ratio?

Accepted Answer

A) France 
B) the United States 
C) Sweden 
D) the United Kingdom 
E) Germany 
A) France 
B) the United States 
C) Sweden 
D) the United Kingdom 
E) Germany

Question 18

Government expenditures include:

Accepted Answer

A) state government spending. 
B) federal government spending. 
C) local government spending. 
D) all of the above 
E) none of the above 
A) state government spending. 
B) federal government spending. 
C) local government spending. 
D) all of the above 
E) none of the above

Question 19

The budget balance is the:

Accepted Answer

A) level of firm investment. 
B) difference between exports and imports. 
C) difference between household spending and income 
D) difference between tax revenue and government spending. 
E) difference between movements of assets across countries. 
A) level of firm investment. 
B) difference between exports and imports. 
C) difference between household spending and income 
D) difference between tax revenue and government spending. 
E) difference between movements of assets across countries.

Question 20

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.The only period(s)in which the federal government ran a budget surplus since 1970 was (were):

Accepted Answer

A) 1998-2002. 
B) 1970. 
C) 1973-2001. 
D) none of the above 
E) a and b 
A) 1998-2002. 
B) 1970. 
C) 1973-2001. 
D) none of the above 
E) a and b

The largest U.S.debt-to-GDP ratio occurred during the Great Depression.

If a government has a difficult time raising funds by borrowing,it must print money,which generates inflation.

The economic meaning of the intertemporal budget constraint is that:

The country with the smallest annual government spending-to-GDP ratio is:

The government's intertemporal budget constraint is a simple two-period case in which:

Assume the government does not "print money." Can the government run persistent budget deficits?

When we discuss government expenditure,we are talking about only purchases of goods and services.

The ratio of federal government spending to GDP in the United States is about:

An explanation of why governments are willing to burden future generations with debt to finance a war today is:

We can compensate future generations for the depletion of nonrenewable resources by increasing the stock of knowledge in the present.

The sources of funds for the government are:

The national income identity can be rearranged to show that equals .

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," __________,assuming current federal government spending patterns.

What are the largest and smallest individual federal government expenditures? Source of revenues?

If current generations are depleting nonrenewable resources,they must compensate future generations by:

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," the main culprit for the increase in federal government spending to about 40 percent of GDP in 2075 is (are):

Which of the following countries has the largest government spending-to-GDP ratio?

Government expenditures include:

The budget balance is the:

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.The only period(s)in which the federal government ran a budget surplus since 1970 was (were):

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 17: The Government and the Macroeconomy

The largest U.S.debt-to-GDP ratio occurred during the Great Depression.

If a government has a difficult time raising funds by borrowing,it must print money,which generates inflation.

The economic meaning of the intertemporal budget constraint is that:

The country with the smallest annual government spending-to-GDP ratio is:

The government's intertemporal budget constraint is a simple two-period case in which:

Assume the government does not "print money." Can the government run persistent budget deficits?

When we discuss government expenditure,we are talking about only purchases of goods and services.

The ratio of federal government spending to GDP in the United States is about:

An explanation of why governments are willing to burden future generations with debt to finance a war today is:

We can compensate future generations for the depletion of nonrenewable resources by increasing the stock of knowledge in the present.

The sources of funds for the government are:

The national income identity can be rearranged to show that __________ equals __________.

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," __________,assuming current federal government spending patterns.

What are the largest and smallest individual federal government expenditures? Source of revenues?

If current generations are depleting nonrenewable resources,they must compensate future generations by:

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," the main culprit for the increase in federal government spending to about 40 percent of GDP in 2075 is (are):

Which of the following countries has the largest government spending-to-GDP ratio?

Government expenditures include:

The budget balance is the:

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.The only period(s)in which the federal government ran a budget surplus since 1970 was (were):

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market,wages,and Unemployment

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

The national income identity can be rearranged to show that equals .