Exam 17: The Government and the Macroeconomy

Write down the government's budget constraint.Be sure to identify all the components.If the government is running a budget deficit,how can it finance its expenditures?

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," the share of federal government spending in GDP will climb to 40 percent by 2075,__________.

The federal government usually finances its budget deficit by:

Which of the following is an indicator of whether or not a country can borrow?

The government uses funds to:

The current U.S.debt-to-GDP ratio is about:

According to the law of diminishing returns,the longer we live,the more we will be willing to pay relatively more for medical care than for other goods and services.

In the post-World War II U.S.economy,the rapid expansion of federal government debt began during:

The idea that present generations benefit from borrowing what future generations must pay is called:

Given what you know about the sizes of economies,which of the following countries probably would find it impossible to borrow more than $500 billion?

The basic point of generational accounting is that high and rising debt-GDP ratios imply lower tax rates on future generations.

The government's intertemporal budget constraint assumes the budget is always balanced.

Argentina,Mexico,and Brazil have all defaulted on their debt at one time or another.

__________ implies (imply)that,holding the present value of government spending constant,budget deficits will not crowd out investment.

-Explain how budget deficits lead to crowding out.Is there evidence of this?

Given what you know about the sizes of economies,which of the following countries probably would find it impossible to borrow more than $500 billion?

If we assume that ,which of the following represents the government's budget constraint?

The largest debt-to-GDP ratio is in the United States.

Under which condition can the government continue to accumulate debt?

Which of the following is not an issue of large deficits and a large debt-to-GDP ratio for the economy?