Exam 33: Budget Deficits in the Short and Long Run

Suppose that the economy is currently at full employment.All other things being equal, if the government implements restrictive policies then the appropriate monetary policy is

What happens typically to a budget deficit during an economic recovery?

If the Fed is increasing its holdings of government bonds at the same time the federal deficit is increasing,

The crowding-in effect depends on the sensitivity of investment to

When the economy has substantial additional saving, deficit spending will have a large "crowding out" effect.

Which of the following statements is incorrect?

During the late 1980s and early 1990s, most of the budget deficits were accounted for by

The strict crowding-out argument relies on the assumption that

The structural deficit is equal to expenditures

The federal budget went $161 billion in fiscal year 2007 to $1 trillion in the next two to three years.What are the main factors that contributed to this increase?

The Troubled Asset Relief Program (TARP) totaled ____ and the fiscal stimulus package of 2009 totaled ____.

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

What is "crowding out"? Why is it important in discussions of fiscal policy? Use an appropriate diagram to illustrate your answer.

In contrast to Argentina in 2001, the United States debt is less of a burden because the U.S.debt is

The federal budget deficit in 2009 was more than eight times larger than the deficit in 2007.

The budget deficit

The crowding-out effect of higher interest rates can be avoided by

Monetary and fiscal policy are primarily tools for long-run economic stabilization.​

The remarkable fact about the structural deficit after 1983 was that it was

A recessionary gap causes national debt to increase because