Exam 4: Budget Analysis and Deficit Financing

Suppose cutting taxes both reduces the percentage of income that is taxed and increases the size of taxable incomes.Which scoring method takes both effects into account?

Which of the following is TRUE?

The federal government's budget deficit ballooned to nearly 10% of GDP in 2009 and then:

If the interest rate is 10%,what is the present discounted value of receiving $100 two years from now?

In January 2001,the Congressional Budget Office (CBO)projected a budget surplus of nearly $6 trillion over the next 10 years,but it never materialized.According to the textbook,what does this erroneous projection imply?

The budget process sets which of the following?

When the 2001 tax cuts were passed,they were set to expire after:

Complete the following: _________ spending refers to funds for programs for which funding levels are automatically set by the number of eligible recipients,and Congress sets_________ spending by annual appropriations.

Suppose that a state legislature votes to increase spending because of an unexpected recession.This is an example of which of the following?

Some have argued in favor of reducing taxes on repatriated earnings that companies operating in the United States have made in other countries.Such a tax break could lead to a sharp increase in the amount of repatriated earnings and raise tax revenues.If such an increase were temporary,what would be the effect on the real budget deficit for the current year? What would be the effect on the structural deficit? Explain.

Suppose that the consumer price index fell by 4% between this year and last year,and the price of a typical automobile fell by 3%.Which of the following is TRUE?

Cash accounting measures the deficit as the:

A balanced budget requires that:

The budget process distinguishes between:

Explain the recent proposals of an explicit balanced budget amendment in relation to PAYGO.What are the views of supporters and opponents of these proposals?

Suppose the government spends $3 trillion and collects $2 trillion in taxes this year.The ________ is equal to __________.

Using the generational accounting method as a measure of the long-run budget,which of the following statements is TRUE of people living in 1998 regarding net benefits from the government over their lifetime?

Explain the views of conservatives and liberals regarding the causes of persistent federal budget deficits.

Suppose your state passes a law that adjusts spending,based on a preset formula,to offset cyclical changes in the economy.This is an example of:

A cyclically adjusted budget deficit accounts for the effect of _____ on the budget deficit.