Exam 13: B: Fiscal Policy, Deficits, Surpluses, and Debt

Some economists believe the budget deficit is directly linked to the trade deficit through real interest rates and the international value of the dollar.

Using Image 13.2 Global Perspective, which of the following countries had the lowest public debt as a percentage of GDP in 2015?

The crowding-out of investment may be avoided if a budget deficit is financed by issuing new money.

In Year 1, the actual budget deficit was $150 billion and the cyclically adjusted deficit was $125 billion.In Year 2, the actual budget deficit was $125 billion and the cyclically adjusted deficit was $100 billion.It can be concluded that fiscal policy from Year 1 to Year 2 was:

If you are told that the government had an actual budget deficit of $50 billion, then you would:

Refer to the above graph.The crowding-out effect would be illustrated by a:

Actions by the Federal government that decrease the progressiveness of the tax system:

Contractionary fiscal policy will do what to the government budget, assuming that was balanced at the start?

Which of the following is the best example of public investment?

Which of the following phases of a business cycle generates cyclical deficit (a movement from a surplus to a deficit) as a by-product?

An example of a built-in automatic stabilizer for the Canadian economy is:

The crowding-out effect arises when:

The Federal budget deficit is calculated each year by:

Which one of the following might offset a crowding-out effect of an increase in government spending financed through expansion of the public debt?

Refer to the above diagram where T is tax revenues and G is government expenditures.All figures are in billions of dollars.If the full-employment GDP is $400 billion while the actual GDP is $200 billion, the cyclical deficit is:

Suppose that in an economy with a MPC of .5 the government wanted to shift the aggregate demand curve rightward by $80 billion at each price level to expand real GDP.It could:

Assume the economy is in the midst of a severe recession.Which of the following policies would be consistent with discretionary fiscal policy?

A cyclical surplus (movement from a deficit to a surplus) is a by-product of what stage of the business cycle?

In an aggregate demand and aggregate supply graph, an expansionary fiscal policy can be illustrated by a:

Economists refer to a budget deficit which exists when the economy is achieving full employment as a: