Question 1

Which of the following countries has the largest projected net debt as a percentage of their GDP for 2016?

Accepted Answer

A) Japan 
B) The U.S. 
C) Germany 
D) Italy 
E) Australia 
A) Japan 
B) The U.S. 
C) Germany 
D) Italy 
E) Australia

Question 2

U.S.interest payments on the federal debt as a percentage of federal outlays are lower today than in the 1990s.

Accepted Answer

A) True 
 B)False

Question 3

A _____ is a congressional agreement about total outlays,spending by major category,and expected revenues,which guides spending and revenue decisions by the many congressional committees and subcommittees.

Accepted Answer

A) continuing resolution 
B) budget resolution 
C) disclaimer vote 
D) filibuster 
E) stimulus plan 
A) continuing resolution 
B) budget resolution 
C) disclaimer vote 
D) filibuster 
E) stimulus plan

Question 4

If actions by the President and Congress reduce the federal government budget deficit,then interest rates will _____,the U.S.dollar will _____,and the foreign trade deficit will _____.

Accepted Answer

A) increase;appreciate;increase 
B) increase;depreciate;increase 
C) decrease;appreciate;decrease 
D) decrease;depreciate;increase 
E) decrease;depreciate;decrease 
A) increase;appreciate;increase 
B) increase;depreciate;increase 
C) decrease;appreciate;decrease 
D) decrease;depreciate;increase 
E) decrease;depreciate;decrease

Question 5

Which of the following is not included in the calculation of federal debt?

Accepted Answer

A) Debt held by banks 
B) Debt held by firms 
C) Debt held by the U.S.Treasury 
D) Debt held by households 
E) Debt held by foreign entities 
A) Debt held by banks 
B) Debt held by firms 
C) Debt held by the U.S.Treasury 
D) Debt held by households 
E) Debt held by foreign entities

Question 6

One way to measure national debt over time is relative to:

Accepted Answer

A) the cash flow of the banking system. 
B) the economy's production and income. 
C) credit sales of consumer durables over a year. 
D) national home sales in large cities. 
E) the economy's savings. 
A) the cash flow of the banking system. 
B) the economy's production and income. 
C) credit sales of consumer durables over a year. 
D) national home sales in large cities. 
E) the economy's savings.

Question 7

The long-run opportunity cost of government spending crowding out private investment:

Accepted Answer

A) equals about 10 percent of GDP. 
B) lowers interest rates and results in lower interest income for U.S.resource owners. 
C) would be greater if the government's expenditures were invested in building better highways and a more educated workforce. 
D) results from the corresponding contractionary gap. 
E) would be greater if the government's expenditures were devoted to increasing retirement benefits rather than to educating the work force. 
A) equals about 10 percent of GDP. 
B) lowers interest rates and results in lower interest income for U.S.resource owners. 
C) would be greater if the government's expenditures were invested in building better highways and a more educated workforce. 
D) results from the corresponding contractionary gap. 
E) would be greater if the government's expenditures were devoted to increasing retirement benefits rather than to educating the work force.

Question 8

The U.S.spent 3 percent of GDP building and maintaining the public infrastructure between 1950 and 1970.Since 1980,that share has:

Accepted Answer

A) decreased slightly to 2 percent. 
B) decreased all the way to zero. 
C) stayed constant at 3 percent. 
D) increased slightly to 4 percent. 
E) increased significantly to 8 percent. 
A) decreased slightly to 2 percent. 
B) decreased all the way to zero. 
C) stayed constant at 3 percent. 
D) increased slightly to 4 percent. 
E) increased significantly to 8 percent.

Question 9

Discretionary expansionary fiscal policy may not lead to _____.

Accepted Answer

A) decreased national saving 
B) decreased unemployment 
C) inflation 
D) lower interest rates 
E) crowding out 
A) decreased national saving 
B) decreased unemployment 
C) inflation 
D) lower interest rates 
E) crowding out

Question 10

_____ in the United States relative to GDP increased from 37 percent in 1994 to 40 percent in 2013.

Accepted Answer

A) Interest rates 
B) Government outlays 
C) Government revenues 
D) Unemployment rates 
E) Government deficits 
A) Interest rates 
B) Government outlays 
C) Government revenues 
D) Unemployment rates 
E) Government deficits

Question 11

Increases in the fraction of national debt held by foreigners _____ the burden of debt service on future generations _____.

Accepted Answer

A) decrease;because it is easier for the borrowing nation to default on the debt 
B) decrease;but may make the country more vulnerable to foreign intervention 
C) decrease;because debt servicing accomplished by increases in the money supply is not as inflationary as it would be if all debt were held domestically 
D) increase;because taxes to repay the debt are collected within the country but more interest payments on the debt are sent outside 
E) increase;because foreign bondholding pushes up interest rates at the date of issue,increasing crowding out 
A) decrease;because it is easier for the borrowing nation to default on the debt 
B) decrease;but may make the country more vulnerable to foreign intervention 
C) decrease;because debt servicing accomplished by increases in the money supply is not as inflationary as it would be if all debt were held domestically 
D) increase;because taxes to repay the debt are collected within the country but more interest payments on the debt are sent outside 
E) increase;because foreign bondholding pushes up interest rates at the date of issue,increasing crowding out

Question 12

Because deadlines are frequently missed,budgets typically run from year to year based on _____.

Accepted Answer

A) continuing resolutions 
B) budget resolutions 
C) congressional suggestions 
D) the suggestions of the President 
E) the suggestions of the President's Council of Economic Advisers 
A) continuing resolutions 
B) budget resolutions 
C) congressional suggestions 
D) the suggestions of the President 
E) the suggestions of the President's Council of Economic Advisers

Question 13

If discretionary fiscal policy creates a federal budget deficit,the economy must be experiencing falling output.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true of an increase in the federal government budget surplus?

Accepted Answer

A) An increase in surplus results in a decrease in the national saving. 
B) An increase in surplus shifts the aggregate demand curve rightward. 
C) An increase in surplus increases the federal debt. 
D) An increase in surplus dampens aggregate demand in the short run. 
E) An increase in surplus increases the natural rate of unemployment. 
A) An increase in surplus results in a decrease in the national saving. 
B) An increase in surplus shifts the aggregate demand curve rightward. 
C) An increase in surplus increases the federal debt. 
D) An increase in surplus dampens aggregate demand in the short run. 
E) An increase in surplus increases the natural rate of unemployment.

Question 15

Which of the following statements is true?

Accepted Answer

A) Federal budget deficits became progressively smaller during the 1990s and turned into a surplus by 1998. 
B) Federal spending declined relative to GDP,while federal revenues rose relative to GDP during the 1980s. 
C) Functional finance says that policy makers should be concerned less with the economy's potential output and more with balancing the budget annually. 
D) A disadvantage of functional finance is that it increases the level of unemployment during recessions. 
E) A disadvantage of annual financed budget is that it dampens swings in the business cycle without increasing the national debt. 
A) Federal budget deficits became progressively smaller during the 1990s and turned into a surplus by 1998. 
B) Federal spending declined relative to GDP,while federal revenues rose relative to GDP during the 1980s. 
C) Functional finance says that policy makers should be concerned less with the economy's potential output and more with balancing the budget annually. 
D) A disadvantage of functional finance is that it increases the level of unemployment during recessions. 
E) A disadvantage of annual financed budget is that it dampens swings in the business cycle without increasing the national debt.

Question 16

In 2015,the U.S.gross national debt was _____.

Accepted Answer

A) about $1 million 
B) about $1 billion 
C) $1 trillion 
D) $3 trillion 
E) about $18 trillion 
A) about $1 million 
B) about $1 billion 
C) $1 trillion 
D) $3 trillion 
E) about $18 trillion

Question 17

In the United States,since the Great Depression,the federal government has:

Accepted Answer

A) run budget deficits only in periods of recession. 
B) run a budget deficit in almost every year. 
C) practiced a policy of annually balancing the budget. 
D) run budget deficits only in wartime. 
E) run a surplus in most years. 
A) run budget deficits only in periods of recession. 
B) run a budget deficit in almost every year. 
C) practiced a policy of annually balancing the budget. 
D) run budget deficits only in wartime. 
E) run a surplus in most years.

Question 18

The Budget of the United States Government is officially submitted by:

Accepted Answer

A) the President to Congress and contains spending and revenue proposals for the upcoming fiscal year. 
B) Congress to the President and contains spending and revenue proposals for the upcoming fiscal year. 
C) the President to Congress and contains proposals for tax revenues. 
D) Congress to the President and contains proposals for tax revenues. 
E) the President to Congress and is reviewed by the Supreme Court. 
A) the President to Congress and contains spending and revenue proposals for the upcoming fiscal year. 
B) Congress to the President and contains spending and revenue proposals for the upcoming fiscal year. 
C) the President to Congress and contains proposals for tax revenues. 
D) Congress to the President and contains proposals for tax revenues. 
E) the President to Congress and is reviewed by the Supreme Court.

Question 19

Only about one-fourth of the federal budget involves expenditure categories determined by existing obligations and laws.

Accepted Answer

A) True 
 B)False

Question 20

When budget deficits during recessions are covered by budget surpluses during expansions,it is called:

Accepted Answer

A) an annually balanced budget. 
B) a cyclically balanced budget. 
C) crowding out. 
D) crowding in. 
E) a biennial balanced budget. 
A) an annually balanced budget. 
B) a cyclically balanced budget. 
C) crowding out. 
D) crowding in. 
E) a biennial balanced budget.

Which of the following countries has the largest projected net debt as a percentage of their GDP for 2016?

U.S.interest payments on the federal debt as a percentage of federal outlays are lower today than in the 1990s.

A _____ is a congressional agreement about total outlays,spending by major category,and expected revenues,which guides spending and revenue decisions by the many congressional committees and subcommittees.

If actions by the President and Congress reduce the federal government budget deficit,then interest rates will ___,the U.S.dollar will _,and the foreign trade deficit will ___.

Which of the following is not included in the calculation of federal debt?

One way to measure national debt over time is relative to:

The long-run opportunity cost of government spending crowding out private investment:

The U.S.spent 3 percent of GDP building and maintaining the public infrastructure between 1950 and 1970.Since 1980,that share has:

Discretionary expansionary fiscal policy may not lead to _____.

_____ in the United States relative to GDP increased from 37 percent in 1994 to 40 percent in 2013.

Increases in the fraction of national debt held by foreigners _ the burden of debt service on future generations _.

Because deadlines are frequently missed,budgets typically run from year to year based on _____.

If discretionary fiscal policy creates a federal budget deficit,the economy must be experiencing falling output.

Which of the following is true of an increase in the federal government budget surplus?

Which of the following statements is true?

In 2015,the U.S.gross national debt was _____.

In the United States,since the Great Depression,the federal government has:

The Budget of the United States Government is officially submitted by:

Only about one-fourth of the federal budget involves expenditure categories determined by existing obligations and laws.

When budget deficits during recessions are covered by budget surpluses during expansions,it is called:

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

Which of the following countries has the largest projected net debt as a percentage of their GDP for 2016?

U.S.interest payments on the federal debt as a percentage of federal outlays are lower today than in the 1990s.

A _____ is a congressional agreement about total outlays,spending by major category,and expected revenues,which guides spending and revenue decisions by the many congressional committees and subcommittees.

If actions by the President and Congress reduce the federal government budget deficit,then interest rates will _____,the U.S.dollar will _____,and the foreign trade deficit will _____.

Which of the following is not included in the calculation of federal debt?

One way to measure national debt over time is relative to:

The long-run opportunity cost of government spending crowding out private investment:

The U.S.spent 3 percent of GDP building and maintaining the public infrastructure between 1950 and 1970.Since 1980,that share has:

Discretionary expansionary fiscal policy may not lead to _____.

_____ in the United States relative to GDP increased from 37 percent in 1994 to 40 percent in 2013.

Increases in the fraction of national debt held by foreigners _____ the burden of debt service on future generations _____.

Because deadlines are frequently missed,budgets typically run from year to year based on _____.

If discretionary fiscal policy creates a federal budget deficit,the economy must be experiencing falling output.

Which of the following is true of an increase in the federal government budget surplus?

Which of the following statements is true?

In 2015,the U.S.gross national debt was _____.

In the United States,since the Great Depression,the federal government has:

The Budget of the United States Government is officially submitted by:

Only about one-fourth of the federal budget involves expenditure categories determined by existing obligations and laws.

When budget deficits during recessions are covered by budget surpluses during expansions,it is called:

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

If actions by the President and Congress reduce the federal government budget deficit,then interest rates will ___,the U.S.dollar will _,and the foreign trade deficit will ___.

Increases in the fraction of national debt held by foreigners _ the burden of debt service on future generations _.