Question 1

The national debt

Accepted Answer

A)   is currently greater than the annual federal deficit
B)   is reduced by the revenue generated from the federal deficit
C)   decreases as the deficit is reduced
D)   is a flow variable
E)   varies depending on developments in the stock market

Question 2

Nominal federal spending is a

Accepted Answer

A)   good indicator of how responsibility the federal government is
B)   good indicator of the overall economy's performance
C)   measure of the public's concern for the educational needs of the country
D)   warning sign that our governmental officials are sometimes out of control
E)   misleading measure of government's effect,unless it is seen in the context of the country's income

Question 3

Government outlays and government expenditures mean the same thing..

Accepted Answer

A) True 
 B)False

Question 4

What does it mean for the government to "roll over" its debt?

Accepted Answer

A)   Buying bonds from the public to pay off old bonds
B)   Continuing to pay interest on old bonds
C)   Issuing new bonds to pay off old bonds
D)   Running a budget surplus to pay off old bonds
E)   Printing money to pay off old bonds

Question 5

When the U.S.government runs a deficit,it usually does the following:

Accepted Answer

A)   It buys government bonds from the public
B)   It asks the Treasury Department to print money to pay for the deficit
C)   It sells new government bonds to the public
D)   It borrows money directly from the Federal Reserve
E)   It asks the Federal Reserve to print money to pay for the deficit

Question 6

Government outlays

Accepted Answer

A)   are the same as "G" in the short-run macro model.
B)   do not include transfer payments.
C)   are always smaller than government purchases.
D)   are always greater than government purchases.
E)   tend to decline in the long run.

Question 7

Which of the following cases represent the smallest increase in the real national debt?

Accepted Answer

A)   The price level increases by 200 percent and the nominal debt increases by 200 percent.
B)   The price level increases by 200 percent and the nominal debt increases by 100 percent.
C)   The price level increases by 200 percent and the nominal debt increases by 500 percent.
D)   The price level increases by 100 percent and the nominal debt increases by 300 percent.
E)   None of the above

Question 8

Transfer payments provide benefits to

Accepted Answer

A)   all those in need
B)   those who have paid into governmental funds through their workplace
C)   those who are eligible recipients
D)   those who provide some service to the government
E)   anyone transferring from one stage of their life to another

Question 9

To pay interest to those U.S.residents who hold government bonds,the government must tax other U.S.residents,implying that the more we redistribute income among residents to cover interest payments,the higher the average tax rate will have to be.

Accepted Answer

A) True 
 B)False

Question 10

In the long run,

Accepted Answer

A)   large government budget deficits cause productivity to increase,thereby leading to inflation
B)   large government budget deficits drive down interest rates and reduce investment spending
C)   large government budget surpluses mean reductions in the money supply
D)   changes in the government budget deficit have no effect on the capital stock
E)   large government budget deficits drive up interest rates and reduce investment spending

Question 11

Which factors led to the large rise in the government's budget deficit in the early 1980s?

Accepted Answer

A)   The Clinton Administration's health care program
B)   A cutback in military spending
C)   An income tax increase
D)   A build up in military spending
E)   A large and unprecedented economic expansion

Question 12

As a percentage of GDP,non-military government purchases have remained very low and stable.

Accepted Answer

A) True 
 B)False

Question 13

In an expansion,tax payments tend to increase and transfer payments tend to decrease.

Accepted Answer

A) True 
 B)False

Question 14

The large U.S.government budget deficits in the early 1980s were caused by

Accepted Answer

A)   wasteful military spending
B)   declining transfer payments triggered by more expenditures on education and training
C)   President Reagan's attitude toward deficits
D)   a recession,expanded military spending,and income tax cuts
E)   recessionary gaps in GDP

Question 15

The federal government

Accepted Answer

A)   runs a deficit when tax revenues are greater than government purchases.
B)   runs a surplus when tax revenues are smaller than government purchases.
C)   runs a deficit when tax revenues are greater than government outlays.
D)   runs a surplus when tax revenues are greater than government outlays.
E)   runs a surplus when tax revenues are smaller than transfer payments..

Exam 24: Fiscal Policy

Which of the following cases represent the smallest increase in the real national debt?

Correct Answer
verified

The national debt

Correct Answer
verified

What does it mean for the government to "roll over" its debt?

Correct Answer
verified

Government outlays

Correct Answer
verified

Which factors led to the large rise in the government's budget deficit in the early 1980s?

Correct Answer
verified

As a percentage of GDP,non-military government purchases have remained very low and stable.

Correct Answer
verified

In the long run,

Correct Answer
verified

The federal government

Correct Answer
verified

Nominal federal spending is a

Correct Answer
verified

To pay interest to those U.S.residents who hold government bonds,the government must tax other U.S.residents,implying that the more we redistribute income among residents to cover interest payments,the higher the average tax rate will have to be.

Correct Answer
verified

In an expansion,tax payments tend to increase and transfer payments tend to decrease.

Correct Answer
verified

The large U.S.government budget deficits in the early 1980s were caused by

Correct Answer
verified

When the U.S.government runs a deficit,it usually does the following:

Correct Answer
verified

Government outlays and government expenditures mean the same thing..

Correct Answer
verified

Transfer payments provide benefits to

Correct Answer
verified

Exam 24: Fiscal Policy

Which of the following cases represent the smallest increase in the real national debt?

Correct AnswerverifiedShow Answer

The national debt

Correct AnswerverifiedShow Answer

What does it mean for the government to "roll over" its debt?

Correct AnswerverifiedShow Answer

Government outlays

Correct AnswerverifiedShow Answer

Which factors led to the large rise in the government's budget deficit in the early 1980s?

Correct AnswerverifiedShow Answer

As a percentage of GDP,non-military government purchases have remained very low and stable.

Correct AnswerverifiedShow Answer

In the long run,

Correct AnswerverifiedShow Answer

The federal government

Correct AnswerverifiedShow Answer

Nominal federal spending is a

Correct AnswerverifiedShow Answer

To pay interest to those U.S.residents who hold government bonds,the government must tax other U.S.residents,implying that the more we redistribute income among residents to cover interest payments,the higher the average tax rate will have to be.

Correct AnswerverifiedShow Answer

In an expansion,tax payments tend to increase and transfer payments tend to decrease.

Correct AnswerverifiedShow Answer

The large U.S.government budget deficits in the early 1980s were caused by

Correct AnswerverifiedShow Answer

When the U.S.government runs a deficit,it usually does the following:

Correct AnswerverifiedShow Answer

Government outlays and government expenditures mean the same thing..

Correct AnswerverifiedShow Answer

Transfer payments provide benefits to

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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