Question 1

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

Accepted Answer

A) saving gold. 
B) printing more money. 
C) investing in capital. 
D) buying more military equipment. 
E) increasing the stock of renewable resources. 
A) saving gold. 
B) printing more money. 
C) investing in capital. 
D) buying more military equipment. 
E) increasing the stock of renewable resources.

Question 2

The difference between imports and exports is:

Accepted Answer

A) domestic saving. 
B) the trade balance. 
C) foreign saving. 
D) the budget deficit. 
E) a and b 
A) domestic saving. 
B) the trade balance. 
C) foreign saving. 
D) the budget deficit. 
E) a and b

Question 3

Consider the government's intertemporal budget constraint:  
Term A is __________,and term B is __________.

Accepted Answer

A) the present value of government spending;the initial debt 
B) the total annual spending;the deficit 
C) the initial period's spending;the initial debt 
D) the present value of government spending and taxes;the present value of government spending 
E) None of the above is correct. 
A) the present value of government spending;the initial debt 
B) the total annual spending;the deficit 
C) the initial period's spending;the initial debt 
D) the present value of government spending and taxes;the present value of government spending 
E) None of the above is correct.

Question 4

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 government spending in GDP will climb to 40 percent by 2075,assuming current federal government spending patterns.

Accepted Answer

A) True 
 B)False

Question 5

If domestic saving is less than domestic investment,then investment is financed by:

Accepted Answer

A) an inflation tax. 
B) nothing-it cannot be done. 
C) higher interest rates. 
D) foreign saving. 
E) printing more money. 
A) an inflation tax. 
B) nothing-it cannot be done. 
C) higher interest rates. 
D) foreign saving. 
E) printing more money.

Question 6

-Consider Figure 17.1,which shows the federal government receipts and outlays for the period 1970-2006,in billions of dollars.The federal government ran a surplus during the period

Accepted Answer

A) 1980-1997. 
B) 1971-1973. 
C) 1998-2002. 
D) 2002-2006. 
E) Not enough information is given. 
A) 1980-1997. 
B) 1971-1973. 
C) 1998-2002. 
D) 2002-2006. 
E) Not enough information is given.

Question 7

Since 1940,the largest gross federal debt-to-GDP ratio occurred during __________,when it reached about __________.

Accepted Answer

A) 9/11;120 percent 
B) the oil crisis;120 percent 
C) World War II;50 percent 
D) World War II;120 percent 
E) 9/11;65 percent 
A) 9/11;120 percent 
B) the oil crisis;120 percent 
C) World War II;50 percent 
D) World War II;120 percent 
E) 9/11;65 percent

Question 8

According to the law of diminishing returns,the longer we live,

Accepted Answer

A) the more we will be willing to pay more for medical care than for other goods and services. 
B) the larger the burden on taxpayers to finance retirement for retirees. 
C) the less energy we will use. 
D) the less medical care we will need. 
E) the lower our income. 
A) the more we will be willing to pay more for medical care than for other goods and services. 
B) the larger the burden on taxpayers to finance retirement for retirees. 
C) the less energy we will use. 
D) the less medical care we will need. 
E) the lower our income.

Question 9

In the intertemporal budget constraint,the term  
Is called:

Accepted Answer

A) the total debt. 
B) the initial debt. 
C) the government deficit. 
D) the government surplus. 
E) none of the above 
A) the total debt. 
B) the initial debt. 
C) the government deficit. 
D) the government surplus. 
E) none of the above

Question 10

According to the text,the main culprit for the rapid increase in medical expenditures is:

Accepted Answer

A) changing preferences. 
B) the aging of the population. 
C) the rising cost of health insurance. 
D) anecdotes about doctors who induce patients to spend more on medical care than they really would prefer. 
E) the use of new and expensive medical technology. 
A) changing preferences. 
B) the aging of the population. 
C) the rising cost of health insurance. 
D) anecdotes about doctors who induce patients to spend more on medical care than they really would prefer. 
E) the use of new and expensive medical technology.

Question 11

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

Accepted Answer

A) 10 percent. 
B) 50 percent. 
C) 20 percent. 
D) 70 percent. 
E) 36 percent. 
A) 10 percent. 
B) 50 percent. 
C) 20 percent. 
D) 70 percent. 
E) 36 percent.

Question 12

Which of the following should economic policymakers consider to be associated with large deficits and a large debt-to-GDP ratio?

Accepted Answer

A) the importance of economic growth 
B) the possibility of high inflation or default 
C) intergenerational equity 
D) the extent to which deficits crowd out private investment 
E) all of the above 
A) the importance of economic growth 
B) the possibility of high inflation or default 
C) intergenerational equity 
D) the extent to which deficits crowd out private investment 
E) all of the above

Question 13

The basic point of generational accounting is that high and rising debt-GDP ratios imply:

Accepted Answer

A) higher interest rates in the future. 
B) lower tax rates on future generations. 
C) higher tax rates on future generations. 
D) reduced government expenditures in the future. 
E) rising government expenditures in the future. 
A) higher interest rates in the future. 
B) lower tax rates on future generations. 
C) higher tax rates on future generations. 
D) reduced government expenditures in the future. 
E) rising government expenditures in the future.

Question 14

__________ is (are)what may happen when the central government needs to borrow to finance its deficit to the detriment of private firms.

Accepted Answer

A) Lower interest rates 
B) Crowding out 
C) Higher rates of inflation 
D) A lower marginal product of capital 
E) More unemployment 
A) Lower interest rates 
B) Crowding out 
C) Higher rates of inflation 
D) A lower marginal product of capital 
E) More unemployment

Question 15

Income minus taxes is often called:

Accepted Answer

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

Question 16

U.S.government debt that is not held by the public often is not counted in economic analyses because:

Accepted Answer

A) it is paid out to U.S.citizens. 
B) it is debt to a very large institution. 
C) it is an asset transfer from one branch of government to another. 
D) it is part of the Social Security system. 
E) it is rolled over into new debt. 
A) it is paid out to U.S.citizens. 
B) it is debt to a very large institution. 
C) it is an asset transfer from one branch of government to another. 
D) it is part of the Social Security system. 
E) it is rolled over into new debt.

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

The difference between imports and exports is:

Consider the government's intertemporal budget constraint: Term A is ,and term B is .

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 government spending in GDP will climb to 40 percent by 2075,assuming current federal government spending patterns.

If domestic saving is less than domestic investment,then investment is financed by:

-Consider Figure 17.1,which shows the federal government receipts and outlays for the period 1970-2006,in billions of dollars.The federal government ran a surplus during the period

Since 1940,the largest gross federal debt-to-GDP ratio occurred during ,when it reached about .

According to the law of diminishing returns,the longer we live,

In the intertemporal budget constraint,the term Is called:

According to the text,the main culprit for the rapid increase in medical expenditures is:

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

Which of the following should economic policymakers consider to be associated with large deficits and a large debt-to-GDP ratio?

The basic point of generational accounting is that high and rising debt-GDP ratios imply:

__________ is (are)what may happen when the central government needs to borrow to finance its deficit to the detriment of private firms.

Income minus taxes is often called:

U.S.government debt that is not held by the public often is not counted in economic analyses because:

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

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

The difference between imports and exports is:

Consider the government's intertemporal budget constraint: Term A is __________,and term B is __________.

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 government spending in GDP will climb to 40 percent by 2075,assuming current federal government spending patterns.

If domestic saving is less than domestic investment,then investment is financed by:

-Consider Figure 17.1,which shows the federal government receipts and outlays for the period 1970-2006,in billions of dollars.The federal government ran a surplus during the period

Since 1940,the largest gross federal debt-to-GDP ratio occurred during __________,when it reached about __________.

According to the law of diminishing returns,the longer we live,

In the intertemporal budget constraint,the term Is called:

According to the text,the main culprit for the rapid increase in medical expenditures is:

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

Which of the following should economic policymakers consider to be associated with large deficits and a large debt-to-GDP ratio?

The basic point of generational accounting is that high and rising debt-GDP ratios imply:

__________ is (are)what may happen when the central government needs to borrow to finance its deficit to the detriment of private firms.

Income minus taxes is often called:

U.S.government debt that is not held by the public often is not counted in economic analyses because:

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

Consider the government's intertemporal budget constraint: Term A is ,and term B is .

Since 1940,the largest gross federal debt-to-GDP ratio occurred during ,when it reached about .