Question 1

When the government's outlays exceed its tax revenues, the government

Accepted Answer

A)  incurs a budget deficit. 
B)  needs to borrow. 
C)  debt increases. 
D)  All of the above answers are correct. 
A)  incurs a budget deficit. 
B)  needs to borrow. 
C)  debt increases. 
D)  All of the above answers are correct.

Question 2

If the government runs a surplus, the total amount of government debt is

Accepted Answer

A)  constant. 
B)  decreasing. 
C)  zero. 
D)  increasing. 
A)  constant. 
B)  decreasing. 
C)  zero. 
D)  increasing.

Question 3

The U.S. government's budget

Accepted Answer

A)  must be balanced each year. 
B)  has mostly been in surplus during the past 30 years. 
C)  has always been in deficit during the past 30 years. 
D)  has mostly been in deficit during the past 30 years. 
A)  must be balanced each year. 
B)  has mostly been in surplus during the past 30 years. 
C)  has always been in deficit during the past 30 years. 
D)  has mostly been in deficit during the past 30 years.

Question 4

The supply side effects of a change in taxes on labor income means that _ in taxes on labor income shift the .

Accepted Answer

A)  an increase; labor supply curve rightward 
B)  a decrease; labor demand curve rightward 
C)  an increase; labor supply curve leftward 
D)  a decrease; labor demand curve leftward 
A)  an increase; labor supply curve rightward 
B)  a decrease; labor demand curve rightward 
C)  an increase; labor supply curve leftward 
D)  a decrease; labor demand curve leftward

Question 5

When the economy grows, increase because real GDP _ .

Accepted Answer

A)  recognition lags; increases 
B)  induced taxes; decreases 
C)  structural deficits; decreases 
D)  induced taxes; increases 
A)  recognition lags; increases 
B)  induced taxes; decreases 
C)  structural deficits; decreases 
D)  induced taxes; increases

Question 6

-In the above figure, which fiscal policy could help move the economy to potential GDP?

Accepted Answer

A)  increasing government expenditure 
B)  decreasing autonomous taxes 
C)  decreasing government expenditure 
D)  Both answers A and B are correct. 
A)  increasing government expenditure 
B)  decreasing autonomous taxes 
C)  decreasing government expenditure 
D)  Both answers A and B are correct.

Question 7

Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the inflation rate is 4 percent. In this case, the real after- tax interest rate is

Accepted Answer

A)  3.0 percent. 
B)  3.5 percent. 
C)  4.0 percent. 
D)  - 0.5 percent. 
A)  3.0 percent. 
B)  3.5 percent. 
C)  4.0 percent. 
D)  - 0.5 percent.

Question 8

A cyclical surplus is a

Accepted Answer

A)  budget surplus only because real GDP is greater than potential GDP. 
B)  nominal, as opposed to real, budget surplus. 
C)  budget surplus only because real GDP is equal to potential GDP. 
D)  budget surplus only because real GDP is less than potential GDP. 
A)  budget surplus only because real GDP is greater than potential GDP. 
B)  nominal, as opposed to real, budget surplus. 
C)  budget surplus only because real GDP is equal to potential GDP. 
D)  budget surplus only because real GDP is less than potential GDP.

When the government's outlays exceed its tax revenues, the government

If the government runs a surplus, the total amount of government debt is

The U.S. government's budget

The supply side effects of a change in taxes on labor income means that _ in taxes on labor income shift the .

When the economy grows, increase because real GDP _ .

-In the above figure, which fiscal policy could help move the economy to potential GDP?

Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the inflation rate is 4 percent. In this case, the real after- tax interest rate is

A cyclical surplus is a

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Monetary Policy

International Trade Policy

Filters

Exam 13: Fiscal Policy

When the government's outlays exceed its tax revenues, the government

If the government runs a surplus, the total amount of government debt is

The U.S. government's budget

The supply side effects of a change in taxes on labor income means that _ in taxes on labor income shift the .

When the economy grows, increase because real GDP _ .

-In the above figure, which fiscal policy could help move the economy to potential GDP?

Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the inflation rate is 4 percent. In this case, the real after- tax interest rate is

A cyclical surplus is a

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Monetary Policy

International Trade Policy

Filters