Exam 14: Deficit Spending and the Public Debt

Suppose the economy is initially operating at full employment.A reduction in the size of the budget deficit will cause which of the following in the short run?

When government spending exceeds tax revenues during a specific time period,this is known as a

Why is it unlikely that tax increases will be the way to eliminate current U.S.federal budget deficits?

Politicians have suggested that the budget deficit could be reduced by

Some economists believe that deficit spending can impose a burden on future generations.Which of the following does NOT explain the burden?

The total value of all outstanding federal government securities is

In the long run,a higher government deficit does not affect equilibrium real Gross Domestic Product (GDP),so that continuous increases in the government deficit will

In the long run,a higher government budget deficit causes

A trade surplus occurs when

Historical evidence seems to indicate that

The amount of funds the Social Security system has loaned the federal government is

If the government spends less than what it receives in taxes during a given interval,then the result is

By approximately how much would the federal government have to raise each worker's annual taxes to eliminate the current federal budget deficit?

What is true about government budget deficits and surpluses since 1940?

When government spending is equal to the tax revenues during a specific time period,this is known as a

Which of the following correctly describes a way in which deficit spending can impose a burden on future generations? I.Failure to allocate deficit spending to uses that boost future real Gross Domestic Product (GDP)will require taxing future generations at a higher rate to repay the resulting higher public debt. II.Government deficits that lead to higher employment and real Gross Domestic Product (GDP)in the future will generate increased income taxes for future governments,which will respond by spending the higher tax revenues,creating higher future government budget deficits. III.Other things being equal,deficit spending fuels increased consumption of goods and services by the current generation that crowds out capital investment,thereby leaving future generations with a smaller stock of capital than otherwise would have existed.

Expressing the U.S.federal budget deficit as a percentage of Gross Domestic Product (GDP)

Which of the following is true of the U.S.trade balance and the federal government budget?

Which of the following is true about how trade deficits and government budget deficits are related?

Which of the following is true of the relationship between U.S.trade deficits and federal government budget deficits?