Exam 12: Deficits and Debt

Automatic stabilizers

Foreign households and institutions hold approximately ________ percent of the U.S.national debt.

For the convenience of analyzing the part of the deficit that is sensitive to fiscal policy,the actual deficit is divided into which of the following components?

The Budget Enforcement Act was an example of a debt ceiling.

An opportunity cost that occurs because of increased government spending is

Debt accumulation by the U.S.government in the 1980s:

In order to maintain a balanced budget every year,during a recession the government would have to

Uncontrollable government spending includes

Which of the following best describes the federal budget during the 1990s?

The cost of servicing the debt may increase if

Which of the following might encourage the government to let inflation rates rise?

Refer to Figure 12.1.An increase in government spending financed with external debt would move the economy's potential consumption from point

Selling bonds to finance new government debt leads to an opportunity cost that is

A budget surplus is

According to Figure 12.1,if the economy moves from point C to point A because of increased government spending,the amount of private spending crowded out is equal to the distance

Which of the following is not true when the economy is fully employed and government bonds are sold to finance greater government spending?

According to Keynes,the goal of macroeconomic policy is not to balance the budget but to achieve equilibrium at full employment.

Deficit spending occurs when

If there was a federal budget surplus and the government decided to either increase spending or decrease taxes,

Increased government purchases crowd out private purchases whenever the economy is