Exam 33: Budget Deficits in the Short and Long Run

Until 1983, almost all U.S.national debt stemmed from financing wars or from the loss tax revenues that accompany recession.

Debt is to deficit as

Which of the following individuals would be most likely to support a balanced budget amendment to the constitution?

The structural deficit is determined by established expenditure-transfer policies and tax rates and is independent of the current level of GDP.

If the U.S.government decides to eliminate a budget surplus by reducing taxes, the most likely effect would be

Crowding out can best be defined as:

Because the personal income tax is an automatic stabilizer,

The actual deficit is a poor measure of the government fiscal policy because it changes independently of intentional government policies.

A deficit will burden future generations

The structural deficit is extremely sensitive to the performance of the economy.

Under a balanced budget policy, a sharp decline in GDP will cause

If the economy is near full employment and Congress cuts taxes, the proper monetary policy should be

The main goal of fiscal policy should always be to

The strict crowding-out argument relies on the assumption that

The share of the net national debt owned by foreign individuals, businesses, and governments increased to 80% in 2010.

The budget deficit is the amount by which a government's expenditures exceed its receipts.

One of the principal reasons the Greek debt crisis of 2010 was so serious was because the Greek debt was

Higher interest rates and, therefore, a decrease in investment spending is most likely to be caused by which policy mix?

The decisions on the part of the government to increase spending by $5 billion will have the largest impact on aggregate demand when the spending is financed by the sale of bonds to

A chart of the ratio of national debt to GDP from 1915 to 2010 would show