Question 1

By issuing bonds to finance a war in the present,in the language of generational accounting,

Accepted Answer

A) pay no burden to enjoy peace. 
B) future generations are paying for the peace they enjoy. 
C) past and present generations pay for the peace. 
D) only past generations pay for peace. 
E) None of the above is correct. 
A) pay no burden to enjoy peace. 
B) future generations are paying for the peace they enjoy. 
C) past and present generations pay for the peace. 
D) only past generations pay for peace. 
E) None of the above is correct.

Question 2

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

Accepted Answer

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

Question 3

The government's intertemporal budget constraint assumes that:

Accepted Answer

A) the budget is never balanced. 
B) the budget is balanced in the first period. 
C) the budget is balanced in the last period. 
D) the budget is always balanced. 
E) none of the above 
A) the budget is never balanced. 
B) the budget is balanced in the first period. 
C) the budget is balanced in the last period. 
D) the budget is always balanced. 
E) none of the above

Question 4

If the economy grows faster than the debt,the government can continue to accumulate debt.

Accepted Answer

A) True 
 B)False

Question 5

What is Norway's debt-to-GDP situation? Why? Given this,what is it doing for the future?

Accepted Answer

Norway has a negative debt-to-GDP ratio

Question 6

An explanation of why governments are willing to burden future generations with debt to finance a war today is that future generations will enjoy peace and must pay something.

Accepted Answer

A) True 
 B)False

Question 7

If the federal government has a budget shortfall,it generally sells some of its real asset holdings to cover the excess outlays.

Accepted Answer

A) True 
 B)False

Question 8

The sources of funds for the government are:

Accepted Answer

A) sales of real assets. 
B) loans from commercial banks. 
C) gold. 
D) all of the above 
E) none of the above 
A) sales of real assets. 
B) loans from commercial banks. 
C) gold. 
D) all of the above 
E) none of the above

Question 9

An implication of the intertemporal budget constraint is that the government can borrow as much as it wants.

Accepted Answer

A) True 
 B)False

Question 10

Income minus taxes is often called:

Accepted Answer

A) investment. 
B) consumption. 
C) disposable income. 
D) gross income. 
E) none of the above 
A) investment. 
B) consumption. 
C) disposable income. 
D) gross income. 
E) none of the above

Question 11

The difference between the gross federal debt and the debt by the public is debt held by:

Accepted Answer

A) other government entities. 
B) the Social Security administration. 
C) foreign central banks. 
D) all of the above 
E) a and b only 
A) other government entities. 
B) the Social Security administration. 
C) foreign central banks. 
D) all of the above 
E) a and b only

Question 12

There is a "magic level" of the debt-GDP ratio that triggers government default.

Accepted Answer

A) True 
 B)False

Question 13

When we discuss government expenditure,we are talking about only federal government expenditures.

Accepted Answer

A) True 
 B)False

Question 14

An implication of the intertemporal budget constraint is that:

Accepted Answer

A) the government can borrow only as much as it can credibly pay back. 
B) the government can borrow as much as it wants. 
C) the government must always have a balanced budget. 
D) the government must balance its budget over the business cycle. 
E) all generations pay the same amount of taxes. 
A) the government can borrow only as much as it can credibly pay back. 
B) the government can borrow as much as it wants. 
C) the government must always have a balanced budget. 
D) the government must balance its budget over the business cycle. 
E) all generations pay the same amount of taxes.

Question 15

During which period did the United States have the largest debt-to-GDP ratio? Why?

Accepted Answer

1940s,fina

Question 16

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.What was the cause of the huge budget deficit beginning in 1940?

Accepted Answer

A) oil crisis 
B) World War II 
C) President Reagan's defense expenditures 
D) Vietnam War 
E) the Volcker recession 
A) oil crisis 
B) World War II 
C) President Reagan's defense expenditures 
D) Vietnam War 
E) the Volcker recession

Question 17

If investors begin to doubt the ability to finance spending with __________,markets will demand __________.

Accepted Answer

A) borrowing;more bonds 
B) only taxes;higher interest rates 
C) taxes and borrowing;higher interest rates 
D) borrowing;less government spending 
E) taxes and borrowing;lower interest rates 
A) borrowing;more bonds 
B) only taxes;higher interest rates 
C) taxes and borrowing;higher interest rates 
D) borrowing;less government spending 
E) taxes and borrowing;lower interest rates

Question 18

The national income identity can be rearranged to show that Private saving + Government saving + Foreign saving = Investment.

Accepted Answer

A) True 
 B)False

Question 19

The debt-to-GDP ratio in the United States was over 100 percent during World War II.

Accepted Answer

A) True 
 B)False

Question 20

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," by the year 2075,spending on entitlement programs will be about __________.

Accepted Answer

A) 19 percent of GDP 
B) 21 percent of household expenditures 
C) 100 percent of tax revenues 
D) 21 percent of GDP 
E) zero 
A) 19 percent of GDP 
B) 21 percent of household expenditures 
C) 100 percent of tax revenues 
D) 21 percent of GDP 
E) zero

By issuing bonds to finance a war in the present,in the language of generational accounting,

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

The government's intertemporal budget constraint assumes that:

If the economy grows faster than the debt,the government can continue to accumulate debt.

What is Norway's debt-to-GDP situation? Why? Given this,what is it doing for the future?

An explanation of why governments are willing to burden future generations with debt to finance a war today is that future generations will enjoy peace and must pay something.

If the federal government has a budget shortfall,it generally sells some of its real asset holdings to cover the excess outlays.

The sources of funds for the government are:

An implication of the intertemporal budget constraint is that the government can borrow as much as it wants.

Income minus taxes is often called:

The difference between the gross federal debt and the debt by the public is debt held by:

There is a "magic level" of the debt-GDP ratio that triggers government default.

When we discuss government expenditure,we are talking about only federal government expenditures.

An implication of the intertemporal budget constraint is that:

During which period did the United States have the largest debt-to-GDP ratio? Why?

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.What was the cause of the huge budget deficit beginning in 1940?

If investors begin to doubt the ability to finance spending with ,markets will demand .

The national income identity can be rearranged to show that Private saving + Government saving + Foreign saving = Investment.

The debt-to-GDP ratio in the United States was over 100 percent during World War II.

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," by the year 2075,spending on entitlement programs will be about __________.

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

By issuing bonds to finance a war in the present,in the language of generational accounting,

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

The government's intertemporal budget constraint assumes that:

If the economy grows faster than the debt,the government can continue to accumulate debt.

What is Norway's debt-to-GDP situation? Why? Given this,what is it doing for the future?

An explanation of why governments are willing to burden future generations with debt to finance a war today is that future generations will enjoy peace and must pay something.

If the federal government has a budget shortfall,it generally sells some of its real asset holdings to cover the excess outlays.

The sources of funds for the government are:

An implication of the intertemporal budget constraint is that the government can borrow as much as it wants.

Income minus taxes is often called:

The difference between the gross federal debt and the debt by the public is debt held by:

There is a "magic level" of the debt-GDP ratio that triggers government default.

When we discuss government expenditure,we are talking about only federal government expenditures.

An implication of the intertemporal budget constraint is that:

During which period did the United States have the largest debt-to-GDP ratio? Why?

-Consider Figure 17.2,which shows the federal government receipts and outlays for the period 1934-2006.What was the cause of the huge budget deficit beginning in 1940?

If investors begin to doubt the ability to finance spending with __________,markets will demand __________.

The national income identity can be rearranged to show that Private saving + Government saving + Foreign saving = Investment.

The debt-to-GDP ratio in the United States was over 100 percent during World War II.

According to a Congressional Budget Office report,"A 125-Year Picture of the Federal Government's Share of the Economy,1950 to 2075," by the year 2075,spending on entitlement programs will be about __________.

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

If investors begin to doubt the ability to finance spending with ,markets will demand .