Exam 13: Deficit Spending and the Public Debt

In the current year, a nation's government spending equals $15 trillion and its revenues are $20 trillion. Which of the following is TRUE?

Ceteris paribus, deficit spending results in higher interest rates, which can

Between the years 1998 and 2001, the U.S. government experienced

When government revenues exceed government outlays in a particular year, this is called

Guaranteed benefits under government programs such as Social Security or Medicare are called

If the net public debt remains unchanged during a given period, but the gross public debt increases, then which of the following statements must be correct?

Are federal budget deficits related to trade deficits?

Which is the fastest growing component of the federal government budget?

How does a government budget deficit occur?

The fastest growing component of the annual federal budgets since 2000 is

When the Social Security Administration holds U.S. Treasury Bonds

Other things being equal, what is the effect of deficit spending on interest rates?

A government balanced budget is

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in Year 3?

In the short run, a fiscal policy action that results in a reduction in the size of the budget deficit will cause

Government spending that changes automatically without action by Congress is

Which of the following statements is TRUE about the difference between the public debt and the government budget deficit?

A government budget deficit is

When government expenditures are greater than tax revenues

Noncontrollable expenditures are called "noncontrollable" because