Question 1

The two ways in which deficit spending can impose a burden on future generations are

Accepted Answer

A) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods. 
B) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. 
C) by substituting private goods for public goods and thereby shifting resources to foreign residents. 
D) by substituting private goods for public goods and thereby benefiting only large businesses. 
A) by requiring future generations to face higher taxes and to work with a lower accumulated stock of capital goods. 
B) by requiring future generations to face lower government spending and to utilize a smaller stock of human capital. 
C) by substituting private goods for public goods and thereby shifting resources to foreign residents. 
D) by substituting private goods for public goods and thereby benefiting only large businesses.

Question 2

The public debt is

Accepted Answer

A) an excess of government spending over government revenues during a given time period. 
B) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. 
C) the total value of all outstanding federal government securities. 
D) all federal government debt irrespective of who owns it. 
A) an excess of government spending over government revenues during a given time period. 
B) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. 
C) the total value of all outstanding federal government securities. 
D) all federal government debt irrespective of who owns it.

Question 3

When government revenues exceed government outlays in a particular year,this is called

Accepted Answer

A) a budget surplus. 
B) a budget deficit. 
C) the national debt. 
D) fiscal policy. 
A) a budget surplus. 
B) a budget deficit. 
C) the national debt. 
D) fiscal policy.

Question 4

The share of net public debt owed to foreign residents today is close to

Accepted Answer

A) 100 percent. 
B) 80 percent. 
C) 50 percent. 
D) 10 percent. 
A) 100 percent. 
B) 80 percent. 
C) 50 percent. 
D) 10 percent.

Question 5

What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short-run and in the long-run.

Accepted Answer

In the short run,a budget deficit will c

Question 6

Suppose that the federal government had a budget deficit of $80 billion in year 1 and $90 billion in year 2,but that it experiences budget surpluses of $40 billion in year 3 and $20 billion in year 4.Also assume that the government uses any budget surpluses to pay down the public debt.At the end of these four years,the Federal government's public debt would have

Accepted Answer

A) decreased by $110 billion. 
B) increased by $230 billion. 
C) increased by $110 billion. 
D) decreased by $57.5 billion. 
A) decreased by $110 billion. 
B) increased by $230 billion. 
C) increased by $110 billion. 
D) decreased by $57.5 billion.

Question 7

If the government borrows to purchase goods and services,today's consumption of government goods and services will be paid for by

Accepted Answer

A) today's taxpayers. 
B) government employees. 
C) future taxpayers. 
D) today's taxpayers and tomorrow's taxpayers in even shares. 
A) today's taxpayers. 
B) government employees. 
C) future taxpayers. 
D) today's taxpayers and tomorrow's taxpayers in even shares.

Question 8

Today,U.S.government spending on entitlements represents ________ of the total federal budget.

Accepted Answer

A) about 10 percent 
B) less than 25 percent 
C) nearly 60 percent 
D) nearly 90 percent 
A) about 10 percent 
B) less than 25 percent 
C) nearly 60 percent 
D) nearly 90 percent

Question 9

Guaranteed benefits under government programs such as Social Security or Medicare are called

Accepted Answer

A) discretionary spending. 
B) controllable expenditures. 
C) entitlements. 
D) automatic stabilizers. 
A) discretionary spending. 
B) controllable expenditures. 
C) entitlements. 
D) automatic stabilizers.

Question 10

The largest expenditure component of the federal budget is spending on

Accepted Answer

A) the military. 
B) entitlement programs. 
C) environmental protection programs. 
D) foreign aid. 
A) the military. 
B) entitlement programs. 
C) environmental protection programs. 
D) foreign aid.

Question 11

Which of the following statements has usually held true about the relationship between the trade deficits and government budget deficits?

Accepted Answer

A) There is no relationship between trade deficits and budget deficits. 
B) There is a positive relationship between trade deficits and budget deficits. 
C) There is a negative relationship between trade deficits and budget deficits. 
D) A relationship exists only when there is a balanced budget. 
A) There is no relationship between trade deficits and budget deficits. 
B) There is a positive relationship between trade deficits and budget deficits. 
C) There is a negative relationship between trade deficits and budget deficits. 
D) A relationship exists only when there is a balanced budget.

Question 12

Since 1940,the U.S.government has experienced

Accepted Answer

A) about the same number of years with budget deficits as with budget surpluses. 
B) twice as many annual budget surpluses as annual budget deficits. 
C) only one year with a budget surplus. 
D) many more budget deficits than budget surpluses. 
A) about the same number of years with budget deficits as with budget surpluses. 
B) twice as many annual budget surpluses as annual budget deficits. 
C) only one year with a budget surplus. 
D) many more budget deficits than budget surpluses.

Question 13

Gross public debt minus all government interagency borrowing is

Accepted Answer

A) government budget deficit. 
B) net public debt. 
C) U.S.Treasury bonds. 
D) an entitlement. 
A) government budget deficit. 
B) net public debt. 
C) U.S.Treasury bonds. 
D) an entitlement.

Question 14

When government expenditures are greater than tax revenues

Accepted Answer

A) there will be budget deficit. 
B) there will be budget surplus. 
C) automatic stabilizers do not kick in. 
D) the public debt will be reduced. 
A) there will be budget deficit. 
B) there will be budget surplus. 
C) automatic stabilizers do not kick in. 
D) the public debt will be reduced.

Question 15

-Suppose that initially there is no public debt.Using the above table,the public debt over this four year period would have

Accepted Answer

A) increased by $215. 
B) decreased by $100. 
C) increased by $1,375. 
D) decreased by $1,590. 
A) increased by $215. 
B) decreased by $100. 
C) increased by $1,375. 
D) decreased by $1,590.

Question 16

Explain the differences between the public debt and the government budget deficit.

Accepted Answer

The public debt is a stock measured at a

Question 17

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

Accepted Answer

A) a balanced budget. 
B) the gross public debt. 
C) the net public debt. 
D) a government budget deficit. 
A) a balanced budget. 
B) the gross public debt. 
C) the net public debt. 
D) a government budget deficit.

Question 18

A government budget surplus occurs during a budget year when

Accepted Answer

A) tax revenues > government spending. B) tax revenues = government spending. C) tax revenues < government spending. D) tax revenues + government spending = personal income. A) tax revenues > government spending. B) tax revenues = government spending. C) tax revenues < government spending. D) tax revenues + government spending = personal income.

Question 19

The public debt can be thought of as

Accepted Answer

A) the total amount consumers owe on their credit cards. 
B) the total amount in taxes consumers pay to the government. 
C) accumulated budget deficits and surpluses. 
D) the total amount the government spends for goods and services. 
A) the total amount consumers owe on their credit cards. 
B) the total amount in taxes consumers pay to the government. 
C) accumulated budget deficits and surpluses. 
D) the total amount the government spends for goods and services.

Question 20

Which of the following statements is true about the public debt and future generations?

Accepted Answer

A) Future generations will always be worse off because they will have to pay off the public debt. 
B) Increased consumption today will lead to increases in the capital stock in the future. 
C) Future generations may be better off if the rate of return on the borrowed funds is higher than the interest rate paid to foreign residents. 
D) The public debt cannot be held by foreign residents therefore we really owe the debt to ourselves. 
A) Future generations will always be worse off because they will have to pay off the public debt. 
B) Increased consumption today will lead to increases in the capital stock in the future. 
C) Future generations may be better off if the rate of return on the borrowed funds is higher than the interest rate paid to foreign residents. 
D) The public debt cannot be held by foreign residents therefore we really owe the debt to ourselves.

The two ways in which deficit spending can impose a burden on future generations are

The public debt is

When government revenues exceed government outlays in a particular year,this is called

The share of net public debt owed to foreign residents today is close to

What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short-run and in the long-run.

If the government borrows to purchase goods and services,today's consumption of government goods and services will be paid for by

Today,U.S.government spending on entitlements represents ________ of the total federal budget.

Guaranteed benefits under government programs such as Social Security or Medicare are called

The largest expenditure component of the federal budget is spending on

Which of the following statements has usually held true about the relationship between the trade deficits and government budget deficits?

Since 1940,the U.S.government has experienced

Gross public debt minus all government interagency borrowing is

When government expenditures are greater than tax revenues

-Suppose that initially there is no public debt.Using the above table,the public debt over this four year period would have

Explain the differences between the public debt and the government budget deficit.

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

A government budget surplus occurs during a budget year when

The public debt can be thought of as

Which of the following statements is true about the public debt and future generations?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 14: Deficit Spending and the Public Debt

The two ways in which deficit spending can impose a burden on future generations are

The public debt is

When government revenues exceed government outlays in a particular year,this is called

The share of net public debt owed to foreign residents today is close to

What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short-run and in the long-run.

If the government borrows to purchase goods and services,today's consumption of government goods and services will be paid for by

Today,U.S.government spending on entitlements represents ________ of the total federal budget.

Guaranteed benefits under government programs such as Social Security or Medicare are called

The largest expenditure component of the federal budget is spending on

Which of the following statements has usually held true about the relationship between the trade deficits and government budget deficits?

Since 1940,the U.S.government has experienced

Gross public debt minus all government interagency borrowing is

When government expenditures are greater than tax revenues

-Suppose that initially there is no public debt.Using the above table,the public debt over this four year period would have

Explain the differences between the public debt and the government budget deficit.

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

A government budget surplus occurs during a budget year when

The public debt can be thought of as

Which of the following statements is true about the public debt and future generations?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters