Question 1

The economic meaning of the intertemporal budget constraint is that:

Accepted Answer

A)  the government's budget never has to balance. 
B)  the government's budget must balance period by period. 
C)  the present discounted value of the government's budget must balance. 
D)  the government can always push its debt on future generations. 
E)  every generation faces the same tax schedule. 
A)  the government's budget never has to balance. 
B)  the government's budget must balance period by period. 
C)  the present discounted value of the government's budget must balance. 
D)  the government can always push its debt on future generations. 
E)  every generation faces the same tax schedule.

Question 2

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

Accepted Answer

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

Question 3

The source(s) of funds for the government is/are:

Accepted Answer

A)  sales of real assets. 
B)  loans from commercial banks. 
C)  gold. 
D)  All of these answers are correct. 
E)  None of these answers is correct. 
A)  sales of real assets. 
B)  loans from commercial banks. 
C)  gold. 
D)  All of these answers are correct. 
E)  None of these answers is correct.

Question 4

Which of the following is an indicator of whether a country can borrow?

Accepted Answer

A)  the size of the tax base 
B)  the size of the economy 
C)  the reputation of the head of government 
D)  the size of the military 
E)  All of these answers are correct. 
A)  the size of the tax base 
B)  the size of the economy 
C)  the reputation of the head of government 
D)  the size of the military 
E)  All of these answers are correct.

Question 5

According to the law of diminishing returns, the longer we live, the more we will be willing to pay relatively for medical care than for other goods and services.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following countries has defaulted on its debt?

Accepted Answer

A)  France 
B)  Argentina 
C)  the United Kingdom 
D)  Belgium 
E)  China 
A)  France 
B)  Argentina 
C)  the United Kingdom 
D)  Belgium 
E)  China

Question 7

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 8

Since 1970, the federal government budget has been in surplus only during the:

Accepted Answer

A)  oil embargo. 
B)  Kennedy administration. 
C)  Reagan administration. 
D)  collapse of the Bretton Woods system. 
E)  Clinton administration. 
A)  oil embargo. 
B)  Kennedy administration. 
C)  Reagan administration. 
D)  collapse of the Bretton Woods system. 
E)  Clinton administration.

Question 9

According to the 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 policies.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following represents the government's budget constraint?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 11

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to ________ by the year ________, assuming current federal government spending patterns.

Accepted Answer

A)  stabilize; 2075 
B)  stabilize; 2020 
C)  begin growing faster; 2020 
D)  begin growing slower; 2010 
E)  be zero; 2075 
A)  stabilize; 2075 
B)  stabilize; 2020 
C)  begin growing faster; 2020 
D)  begin growing slower; 2010 
E)  be zero; 2075

Question 12

In 2011, the federal government's budget deficit was about:

Accepted Answer

A)  8.6 percent of GDP. 
B)  100 percent of GDP. 
C)  21 percent of household consumption. 
D)  150 percent of nonresidential private investment. 
E)  zero. 
A)  8.6 percent of GDP. 
B)  100 percent of GDP. 
C)  21 percent of household consumption. 
D)  150 percent of nonresidential private investment. 
E)  zero.

Question 13

Write down the government's budget constraint. Be sure to identify all the components. If the government is running a budget deficit, how can it finance its expenditures?

Accepted Answer

The budget constraint is @#IMG-DLM& ,
where @#IMG-DLM& is go

Question 14

Under which condition can the government continue to accumulate debt?

Accepted Answer

A)  if it issues more bonds 
B)  if it promises to pay the debt back 
C)  if the economy grows faster than the debt 
D)  if it appropriates funds from another economy 
E)  None of these answers is correct. 
A)  if it issues more bonds 
B)  if it promises to pay the debt back 
C)  if the economy grows faster than the debt 
D)  if it appropriates funds from another economy 
E)  None of these answers is correct.

Question 15

In the intertemporal budget constraint, the term   is called the:

Accepted Answer

A)  total debt. 
B)  initial debt. 
C)  government deficit. 
D)  government surplus. 
E)  None of these answers is correct. 
A)  total debt. 
B)  initial debt. 
C)  government deficit. 
D)  government surplus. 
E)  None of these answers is correct.

Question 16

Figure 18.3 below shows bond yields on Greek and German 10-year bonds, 2010-2014. Discuss the cause for the divergence between these rates in 2008, the dramatic rise/decline in Greek/German bond yields in 2011, and what are likely reasons for Greek rates rising so sharply in 2011-2013.Figure 18.3: Greek and German 10-Year Bond Yields: 2007-2014

Accepted Answer

Chapters 12 and 14 offer insight into th

Question 17

In the post-World War II U.S. economy, the rapid expansion of federal government debt began during the:

Accepted Answer

A)  oil embargo. 
B)  Kennedy administration. 
C)  Reagan administration. 
D)  collapse of the Bretton Woods system. 
E)  Clinton administration. 
A)  oil embargo. 
B)  Kennedy administration. 
C)  Reagan administration. 
D)  collapse of the Bretton Woods system. 
E)  Clinton administration.

Question 18

If we assume that   , which of the following represents the government's budget constraint?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 19

Government expenditures include ________ government spending.

Accepted Answer

A)  state 
B)  federal 
C)  local 
D)  All of these answers are correct. 
E)  None of these answers is correct. 
A)  state 
B)  federal 
C)  local 
D)  All of these answers are correct. 
E)  None of these answers is correct.

Question 20

The difference between imports and exports is:

Accepted Answer

A)  domestic saving. 
B)  the trade balance. 
C)  foreign saving. 
D)  the budget deficit. 
E)  the real interest rate. 
A)  domestic saving. 
B)  the trade balance. 
C)  foreign saving. 
D)  the budget deficit. 
E)  the real interest rate.

The economic meaning of the intertemporal budget constraint is that:

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

The source(s) of funds for the government is/are:

Which of the following is an indicator of whether a country can borrow?

According to the law of diminishing returns, the longer we live, the more we will be willing to pay relatively for medical care than for other goods and services.

Which of the following countries has defaulted on its debt?

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

Since 1970, the federal government budget has been in surplus only during the:

According to the 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 policies.

Which of the following represents the government's budget constraint?

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to by the year , assuming current federal government spending patterns.

In 2011, the federal government's budget deficit was about:

Write down the government's budget constraint. Be sure to identify all the components. If the government is running a budget deficit, how can it finance its expenditures?

Under which condition can the government continue to accumulate debt?

In the intertemporal budget constraint, the term is called the:

In the post-World War II U.S. economy, the rapid expansion of federal government debt began during the:

If we assume that , which of the following represents the government's budget constraint?

Government expenditures include ________ government spending.

The difference between imports and exports is:

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

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 18: The Government and the Macroeconomy

The economic meaning of the intertemporal budget constraint is that:

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

The source(s) of funds for the government is/are:

Which of the following is an indicator of whether a country can borrow?

According to the law of diminishing returns, the longer we live, the more we will be willing to pay relatively for medical care than for other goods and services.

Which of the following countries has defaulted on its debt?

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

Since 1970, the federal government budget has been in surplus only during the:

According to the 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 policies.

Which of the following represents the government's budget constraint?

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to ________ by the year ________, assuming current federal government spending patterns.

In 2011, the federal government's budget deficit was about:

Write down the government's budget constraint. Be sure to identify all the components. If the government is running a budget deficit, how can it finance its expenditures?

Under which condition can the government continue to accumulate debt?

In the intertemporal budget constraint, the term is called the:

In the post-World War II U.S. economy, the rapid expansion of federal government debt began during the:

If we assume that , which of the following represents the government's budget constraint?

Government expenditures include ________ government spending.

The difference between imports and exports is:

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

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to by the year , assuming current federal government spending patterns.