Question 1

In 2016,Social Security and Medicare payments accounted for almost _____ of federal outlays.

Accepted Answer

A) 7 percent 
B) 25 percent 
C) 15 percent 
D) 38 percent 
E) 52 percent 
A) 7 percent 
B) 25 percent 
C) 15 percent 
D) 38 percent 
E) 52 percent

Question 2

Which of the following is true of an annually balanced federal budget?

Accepted Answer

A) Most economists agree that the federal government should balance its budget just as each household does. 
B) Such a policy would require the government to increase its spending when tax receipts decrease. 
C) Such a policy became popular between the 1930s and 1960s. 
D) Such a policy guarantees that the economy is its potential level. 
E) Such a policy could worsen a contractionary gap. 
A) Most economists agree that the federal government should balance its budget just as each household does. 
B) Such a policy would require the government to increase its spending when tax receipts decrease. 
C) Such a policy became popular between the 1930s and 1960s. 
D) Such a policy guarantees that the economy is its potential level. 
E) Such a policy could worsen a contractionary gap.

Question 3

If an increase in the federal deficit stimulates an economy,_____.

Accepted Answer

A) an expansionary gap exists in the economy 
B) the crowding in of private investment takes place 
C) the crowding out of private investment offsets crowding in of private investment 
D) the crowding out and crowding in of private investment cancels each other out 
E) interest rates increase significantly 
A) an expansionary gap exists in the economy 
B) the crowding in of private investment takes place 
C) the crowding out of private investment offsets crowding in of private investment 
D) the crowding out and crowding in of private investment cancels each other out 
E) interest rates increase significantly

Question 4

During a recession,higher welfare outlays:

Accepted Answer

A) increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy. 
B) decrease the size of the budget deficit regardless of the government's discretionary fiscal policy. 
C) increase the size of the budget deficit only if the government undertakes discretionary fiscal policy. 
D) decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy. 
E) have the same effect on the budget deficit as they do in times of expansion. 
A) increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy. 
B) decrease the size of the budget deficit regardless of the government's discretionary fiscal policy. 
C) increase the size of the budget deficit only if the government undertakes discretionary fiscal policy. 
D) decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy. 
E) have the same effect on the budget deficit as they do in times of expansion.

Question 5

The beginning of the formal budget process is signified by:

Accepted Answer

A) in the form of the Economic Report of the President. 
B) in a report followed shortly by the Economic Report of the President. 
C) at the beginning of the fiscal year. 
D) in a report that should be voted up or down within 60 days. 
E) in a report that requires a two-thirds vote for ratification. 
A) in the form of the Economic Report of the President. 
B) in a report followed shortly by the Economic Report of the President. 
C) at the beginning of the fiscal year. 
D) in a report that should be voted up or down within 60 days. 
E) in a report that requires a two-thirds vote for ratification.

Question 6

Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP.

Accepted Answer

A) True 
 B)False

Question 7

The problem with a detailed federal government budget is that:

Accepted Answer

A) monetary policy becomes more difficult to implement. 
B) it reduces the flexibility of discretionary fiscal policy. 
C) Congress cannot keep it up to date. 
D) there is a shortage of congressional committees that deal with the budget. 
E) there is a short review period,resulting in poor choices in funding programs. 
A) monetary policy becomes more difficult to implement. 
B) it reduces the flexibility of discretionary fiscal policy. 
C) Congress cannot keep it up to date. 
D) there is a shortage of congressional committees that deal with the budget. 
E) there is a short review period,resulting in poor choices in funding programs.

Question 8

Which of the following is not a possible implication of federal budget deficits?

Accepted Answer

A) Crowding out 
B) Increased interest rates 
C) Inflation 
D) Increased trade deficits 
E) Depreciation of the dollar 
A) Crowding out 
B) Increased interest rates 
C) Inflation 
D) Increased trade deficits 
E) Depreciation of the dollar

Question 9

As a result of the global financial crisis in 2008,_____.

Accepted Answer

A) U.S.interest rates fell and the cost of servicing U.S.debt decreased 
B) U.S.citizens increased their purchase of foreign securities 
C) U.S.chronic deficits increased and debt service costs overwhelmed the budget 
D) debt issued by U.S.government entities was judged to be the safest in the world 
E) there was downgrading of the nation's credit risk by the chief credit-rating agency in 2011 
A) U.S.interest rates fell and the cost of servicing U.S.debt decreased 
B) U.S.citizens increased their purchase of foreign securities 
C) U.S.chronic deficits increased and debt service costs overwhelmed the budget 
D) debt issued by U.S.government entities was judged to be the safest in the world 
E) there was downgrading of the nation's credit risk by the chief credit-rating agency in 2011

Question 10

​Among the following cases,the opportunity cost of crowding out is the smallest when the government spends dollars:

Accepted Answer

A) staffing the Internal Revenue Service hotline. 
B) printing stationery for new members of Congress. 
C) placing photographs of the new President in government and diplomatic offices worldwide. 
D) on Social Security benefits. 
E) on new interstate highways. 
A) staffing the Internal Revenue Service hotline. 
B) printing stationery for new members of Congress. 
C) placing photographs of the new President in government and diplomatic offices worldwide. 
D) on Social Security benefits. 
E) on new interstate highways.

Question 11

Which of the following is not a form of crowding out?

Accepted Answer

A) Lower household spending due to higher interest rates 
B) Lower business spending due to higher interest rates 
C) Lower net exports due to higher interest rates 
D) Lower private spending due to higher taxes 
E) Greater output and employment in the short run 
A) Lower household spending due to higher interest rates 
B) Lower business spending due to higher interest rates 
C) Lower net exports due to higher interest rates 
D) Lower private spending due to higher taxes 
E) Greater output and employment in the short run

Question 12

If the automatic stabilizers are creating budget deficits,the economy must be experiencing falling output.

Accepted Answer

A) True 
 B)False

Question 13

A(n)_____ is a budget philosophy that was followed prior to the Great Depression that aimed at matching annual revenues with outlays,except during war time.

Accepted Answer

A) annually balanced budget 
B) annual surplus budget 
C) biennial deficit budget 
D) biennially balanced budget 
E) cyclically balanced budget 
A) annually balanced budget 
B) annual surplus budget 
C) biennial deficit budget 
D) biennially balanced budget 
E) cyclically balanced budget

Question 14

In the 1980s,tax rates were cut,government revenues fell below expectations,and there was a then-historic peacetime deficit.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true of the federal budget process in the U.S.?

Accepted Answer

A) Congress must approve a budget with at least a two-thirds majority vote. 
B) The federal budget must be balanced each year because the volume of international trade reduces if the government has a surplus or a deficit. 
C) Most federal outlays are determined by existing laws. 
D) Congress approves a budget that separates the capital budget and the operating budget. 
E) Detailed budgeting allows the party in power to reward supporters. 
A) Congress must approve a budget with at least a two-thirds majority vote. 
B) The federal budget must be balanced each year because the volume of international trade reduces if the government has a surplus or a deficit. 
C) Most federal outlays are determined by existing laws. 
D) Congress approves a budget that separates the capital budget and the operating budget. 
E) Detailed budgeting allows the party in power to reward supporters.

Question 16

The growth-reducing effects of high public debt are transmitted entirely through high real interest rates on that debt.

Accepted Answer

A) True 
 B)False

Question 17

The U.S.federal debt as a percentage of GDP is currently on the rise.

Accepted Answer

A) True 
 B)False

Question 18

The federal budget deficit becomes _____ during recessions because _____.

Accepted Answer

A) smaller;transfer payments increase and tax revenues decline 
B) larger;transfer payments increase and tax revenues decline 
C) larger;both transfer payments and tax revenues increase 
D) smaller;both transfer payments and tax revenues increase 
E) smaller;both transfer payments and tax revenues decrease 
A) smaller;transfer payments increase and tax revenues decline 
B) larger;transfer payments increase and tax revenues decline 
C) larger;both transfer payments and tax revenues increase 
D) smaller;both transfer payments and tax revenues increase 
E) smaller;both transfer payments and tax revenues decrease

Question 19

Which of the following components of aggregate expenditure is most subject to crowding out?

Accepted Answer

A) Consumption expenditures 
B) Investment spending 
C) Imports 
D) Government purchases of goods and services 
E) National saving 
A) Consumption expenditures 
B) Investment spending 
C) Imports 
D) Government purchases of goods and services 
E) National saving

Question 20

A(n)_____ provides guaranteed benefits for those who qualify under government transfer programs such as Social Security or Medicare.

Accepted Answer

A) entitlement program 
B) excise tax 
C) continuing resolution 
D) biennial budget 
E) employment benefits 
A) entitlement program 
B) excise tax 
C) continuing resolution 
D) biennial budget 
E) employment benefits

In 2016,Social Security and Medicare payments accounted for almost _____ of federal outlays.

Which of the following is true of an annually balanced federal budget?

If an increase in the federal deficit stimulates an economy,_____.

During a recession,higher welfare outlays:

The beginning of the formal budget process is signified by:

Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP.

The problem with a detailed federal government budget is that:

Which of the following is not a possible implication of federal budget deficits?

As a result of the global financial crisis in 2008,_____.

Among the following cases,the opportunity cost of crowding out is the smallest when the government spends dollars:

Which of the following is not a form of crowding out?

If the automatic stabilizers are creating budget deficits,the economy must be experiencing falling output.

A(n)_____ is a budget philosophy that was followed prior to the Great Depression that aimed at matching annual revenues with outlays,except during war time.

In the 1980s,tax rates were cut,government revenues fell below expectations,and there was a then-historic peacetime deficit.

Which of the following is true of the federal budget process in the U.S.?

The growth-reducing effects of high public debt are transmitted entirely through high real interest rates on that debt.

The U.S.federal debt as a percentage of GDP is currently on the rise.

The federal budget deficit becomes _ during recessions because _.

Which of the following components of aggregate expenditure is most subject to crowding out?

A(n)_____ provides guaranteed benefits for those who qualify under government transfer programs such as Social Security or Medicare.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Exam 12: Federal Budgets and Public Policy

In 2016,Social Security and Medicare payments accounted for almost _____ of federal outlays.

Which of the following is true of an annually balanced federal budget?

If an increase in the federal deficit stimulates an economy,_____.

During a recession,higher welfare outlays:

The beginning of the formal budget process is signified by:

Transfer payments are included in the government budget deficit but not included in the government purchases component of GDP.

The problem with a detailed federal government budget is that:

Which of the following is not a possible implication of federal budget deficits?

As a result of the global financial crisis in 2008,_____.

​Among the following cases,the opportunity cost of crowding out is the smallest when the government spends dollars:

Which of the following is not a form of crowding out?

If the automatic stabilizers are creating budget deficits,the economy must be experiencing falling output.

A(n)_____ is a budget philosophy that was followed prior to the Great Depression that aimed at matching annual revenues with outlays,except during war time.

In the 1980s,tax rates were cut,government revenues fell below expectations,and there was a then-historic peacetime deficit.

Which of the following is true of the federal budget process in the U.S.?

The growth-reducing effects of high public debt are transmitted entirely through high real interest rates on that debt.

The U.S.federal debt as a percentage of GDP is currently on the rise.

The federal budget deficit becomes _____ during recessions because _____.

Which of the following components of aggregate expenditure is most subject to crowding out?

A(n)_____ provides guaranteed benefits for those who qualify under government transfer programs such as Social Security or Medicare.

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Economic Decision Makers

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters

Among the following cases,the opportunity cost of crowding out is the smallest when the government spends dollars:

The federal budget deficit becomes _ during recessions because _.