Question 1

In 2016, interest payments on the national debt accounted for almost _____ of federal outlays.

Accepted Answer

A)  7 percent 
B)  25 percent 
C)  14 percent 
D)  52 percent 
E)  40 percent 
A)  7 percent 
B)  25 percent 
C)  14 percent 
D)  52 percent 
E)  40 percent

Question 2

When did interest payments peak in the United States?

Accepted Answer

A)  1981 
B)  1987 
C)  1996 
D)  2007 
E)  2010 
A)  1981 
B)  1987 
C)  1996 
D)  2007 
E)  2010

Question 3

Since the 1960s, the federal government has shifted its focus from national defense to _____

Accepted Answer

A)  interest payments on borrowings. 
B)  environmental protection. 
C)  federal prisons. 
D)  income redistribution. 
E)  federal education aid. 
A)  interest payments on borrowings. 
B)  environmental protection. 
C)  federal prisons. 
D)  income redistribution. 
E)  federal education aid.

Question 4

The Budget Enforcement Act of 1990 _____

Accepted Answer

A)  was a package of spending cuts and tax increases designed to reduce the budget deficit. 
B)  succeeded in balancing the budget cyclically. 
C)  succeeded in balancing the budget within two years. 
D)  identified defense and international programs as the only two areas of potential spending cuts. 
E)  gave the president the authority to make unilateral spending cuts to balance the budget. 
A)  was a package of spending cuts and tax increases designed to reduce the budget deficit. 
B)  succeeded in balancing the budget cyclically. 
C)  succeeded in balancing the budget within two years. 
D)  identified defense and international programs as the only two areas of potential spending cuts. 
E)  gave the president the authority to make unilateral spending cuts to balance the budget.

Question 5

Debt held by the public includes all of the following, except _____

Accepted Answer

A)  households. 
B)  firms. 
C)  Federal Reserve Banks. 
D)  federal agencies. 
E)  foreign entities. 
A)  households. 
B)  firms. 
C)  Federal Reserve Banks. 
D)  federal agencies. 
E)  foreign entities.

Question 6

How much do foreigners own of the U.S. federal debt?

Accepted Answer

A)  about 60 percent 
B)  about 40 percent 
C)  about 20 percent 
D)  about 10 percent 
E)  none 
A)  about 60 percent 
B)  about 40 percent 
C)  about 20 percent 
D)  about 10 percent 
E)  none

Question 7

The federal budget experienced surpluses from _____

Accepted Answer

A)  1998 to 2001. 
B)  2002 to 2006. 
C)  1970 to 1973. 
D)  1991 to 1994. 
E)  1985 to 1988. 
A)  1998 to 2001. 
B)  2002 to 2006. 
C)  1970 to 1973. 
D)  1991 to 1994. 
E)  1985 to 1988.

Question 8

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 9

What would have happened if the debt ceiling had not been raised in early 2011?

Accepted Answer

A)  The U.S. government would have raised taxes. 
B)  The U.S. government would have been in default. 
C)  The U.S. government would have increased borrowings. 
D)  The U.S. government would have paid down debt. 
A)  The U.S. government would have raised taxes. 
B)  The U.S. government would have been in default. 
C)  The U.S. government would have increased borrowings. 
D)  The U.S. government would have paid down debt.

Question 10

In the short run, a surplus federal budget _____

Accepted Answer

A)  reduces national saving. 
B)  boosts domestic saving. 
C)  stimulates aggregate demand. 
D)  inhibits economic growth in the long run. 
E)  increases the federal debt. 
A)  reduces national saving. 
B)  boosts domestic saving. 
C)  stimulates aggregate demand. 
D)  inhibits economic growth in the long run. 
E)  increases the federal debt.

Question 11

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 an economy reaches 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 an economy reaches its potential level. 
E)  Such a policy could worsen a contractionary gap.

Question 12

The budget of an economy is said to be in surplus when _____

Accepted Answer

A)  federal outlays exceed revenues. 
B)  federal revenues exceed outlays. 
C)  the anticipated inflation rate exceeds the actual rate. 
D)  there is a loss of value in the domestic currency with respect to one or more foreign currencies. 
E)  the anticipated interest rate exceeds the actual rate. 
A)  federal outlays exceed revenues. 
B)  federal revenues exceed outlays. 
C)  the anticipated inflation rate exceeds the actual rate. 
D)  there is a loss of value in the domestic currency with respect to one or more foreign currencies. 
E)  the anticipated interest rate exceeds the actual rate.

Question 13

How much does China hold in U.S. federal debt?

Accepted Answer

A)  about 60 percent 
B)  about 40 percent 
C)  about 20 percent 
D)  about 10 percent 
E)  none 
A)  about 60 percent 
B)  about 40 percent 
C)  about 20 percent 
D)  about 10 percent 
E)  none

Question 14

Some economists argue that federal government capital projects, which offer benefits over a number of years, should be financed through deficit financing.

Accepted Answer

A) True 
 B)False

Question 15

A budget philosophy using fiscal policy to achieve the economy's potential GDP, rather than balancing budgets either annually or over the business cycle, is termed _____

Accepted Answer

A)  budget finance. 
B)  functional finance. 
C)  crowding out. 
D)  crowding in. 
E)  deficit financing. 
A)  budget finance. 
B)  functional finance. 
C)  crowding out. 
D)  crowding in. 
E)  deficit financing.

Question 16

A stock variable measuring the net accumulation of past deficits is the _____

Accepted Answer

A)  twin deficit. 
B)  debt ceiling. 
C)  budget deficit. 
D)  projected liability of federal outlays. 
E)  national debt. 
A)  twin deficit. 
B)  debt ceiling. 
C)  budget deficit. 
D)  projected liability of federal outlays. 
E)  national debt.

Question 17

Drawbacks of the federal government budget process include _____

Accepted Answer

A)  the use of continuing resolutions that reward last year's programs without an adequate review of their performance. 
B)  Congress having too much control over the budget. 
C)  a short review period for Congress that results in poor choices in funding programs. 
D)  Congress having to approve a budget with at least a two-thirds majority vote. 
E)  the president having the power to cancel any proposed expenditure without the possibility of a Congressional override. 
A)  the use of continuing resolutions that reward last year's programs without an adequate review of their performance. 
B)  Congress having too much control over the budget. 
C)  a short review period for Congress that results in poor choices in funding programs. 
D)  Congress having to approve a budget with at least a two-thirds majority vote. 
E)  the president having the power to cancel any proposed expenditure without the possibility of a Congressional override.

Question 18

In 2017, Social Security and Medicare payments account 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 19

Who bears the burden of the U.S. federal debt?

Accepted Answer

A)  current taxpayers 
B)  future taxpayers 
C)  foreign buyers of U.S. debt 
D)  the government 
E)  the Federal Reserve 
A)  current taxpayers 
B)  future taxpayers 
C)  foreign buyers of U.S. debt 
D)  the government 
E)  the Federal Reserve

Question 20

Crowding in occurs when government spending improves business expectations about the future and leads to higher business investment spending.

Accepted Answer

A) True 
 B)False

In 2016, interest payments on the national debt accounted for almost _____ of federal outlays.

When did interest payments peak in the United States?

Since the 1960s, the federal government has shifted its focus from national defense to _____

The Budget Enforcement Act of 1990 _____

Debt held by the public includes all of the following, except _____

How much do foreigners own of the U.S. federal debt?

The federal budget experienced surpluses from _____

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

What would have happened if the debt ceiling had not been raised in early 2011?

In the short run, a surplus federal budget _____

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

The budget of an economy is said to be in surplus when _____

How much does China hold in U.S. federal debt?

Some economists argue that federal government capital projects, which offer benefits over a number of years, should be financed through deficit financing.

A budget philosophy using fiscal policy to achieve the economy's potential GDP, rather than balancing budgets either annually or over the business cycle, is termed _____

A stock variable measuring the net accumulation of past deficits is the _____

Drawbacks of the federal government budget process include _____

In 2017, Social Security and Medicare payments account for almost _____ of federal outlays.

Who bears the burden of the U.S. federal debt?

Crowding in occurs when government spending improves business expectations about the future and leads to higher business investment spending.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters

Exam 12: Federal Budgets and Public Policy.

In 2016, interest payments on the national debt accounted for almost _____ of federal outlays.

When did interest payments peak in the United States?

Since the 1960s, the federal government has shifted its focus from national defense to _____

The Budget Enforcement Act of 1990 _____

Debt held by the public includes all of the following, except _____

How much do foreigners own of the U.S. federal debt?

The federal budget experienced surpluses from _____

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

What would have happened if the debt ceiling had not been raised in early 2011?

In the short run, a surplus federal budget _____

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

The budget of an economy is said to be in surplus when _____

How much does China hold in U.S. federal debt?

Some economists argue that federal government capital projects, which offer benefits over a number of years, should be financed through deficit financing.

A budget philosophy using fiscal policy to achieve the economy's potential GDP, rather than balancing budgets either annually or over the business cycle, is termed _____

A stock variable measuring the net accumulation of past deficits is the _____

Drawbacks of the federal government budget process include _____

In 2017, Social Security and Medicare payments account for almost _____ of federal outlays.

Who bears the burden of the U.S. federal debt?

Crowding in occurs when government spending improves business expectations about the future and leads to higher business investment spending.

The Art and Science of Economic Analysis.

Economic Tools and Economic Systems.

Economic Decision Makers.

Demand, Supply, and Markets.

Introduction to Macroeconomics.

Tracking the U. S. Economy.

Unemployment and Inflation.

Productivity and Growth.

Aggregate Demand.

Aggregate Supply.

Fiscal Policy.

Money and the Financial System.

Banking and the Money Supply.

Monetary Theory and Policy.

Macro Policy Debate: Active or Passive?

International Trade.

International Finance.

Economic Development.

Filters