Question 1

What is TRUE about government budget deficits and surpluses since 1940?

Accepted Answer

A) Balanced budgets have been more common than government budget deficits or government budget surpluses. 
B) There have been more government budget surpluses than government budget deficits. 
C) There have been more government budget deficits than government budget surpluses. 
D) The number of government budget deficits is about the same as the number of government budget surpluses. 
A) Balanced budgets have been more common than government budget deficits or government budget surpluses. 
B) There have been more government budget surpluses than government budget deficits. 
C) There have been more government budget deficits than government budget surpluses. 
D) The number of government budget deficits is about the same as the number of government budget surpluses.

Question 2

Gross public debt is the amount of funds that

Accepted Answer

A)  U.S. residents owe to foreign residents. 
B) states owe to the federal government. 
C) the federal government owes to taxpayers. 
D) the federal government owes to all holders of U.S. securities. 
A)  U.S. residents owe to foreign residents. 
B) states owe to the federal government. 
C) the federal government owes to taxpayers. 
D) the federal government owes to all holders of U.S. securities.

Question 3

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in Year 4?

Accepted Answer

A) 5.8 percent 
B) 7.8 percent 
C) 3.6 percent 
D) 2.0 percent 
A) 5.8 percent 
B) 7.8 percent 
C) 3.6 percent 
D) 2.0 percent

Question 4

Are federal budget deficits related to trade deficits?

Accepted Answer

A) Yes. If U.S. consumers buy too many imported goods they don't have money to save and a budget deficit results. 
B) No. The budget deficit is entirely a domestic matter while the trade deficit only affects U.S. citizens who travel abroad. 
C) Yes. As deficit spending goes up, it is likely government borrowing will, too. Then foreign residents who lend funds to the U.S. government have less to spend on our goods, so U.S. exports will fall. 
D) Yes, but only if the quality of U.S. goods and services is deteriorating. 
A) Yes. If U.S. consumers buy too many imported goods they don't have money to save and a budget deficit results. 
B) No. The budget deficit is entirely a domestic matter while the trade deficit only affects U.S. citizens who travel abroad. 
C) Yes. As deficit spending goes up, it is likely government borrowing will, too. Then foreign residents who lend funds to the U.S. government have less to spend on our goods, so U.S. exports will fall. 
D) Yes, but only if the quality of U.S. goods and services is deteriorating.

Question 5

A government budget surplus occurs during a budget year when

Accepted Answer

A) tax revenues > government spending. B) tax revenues = government spending. C) tax revenues < government spending. D) tax revenues + government spending = personal income. A) tax revenues > government spending. B) tax revenues = government spending. C) tax revenues < government spending. D) tax revenues + government spending = personal income.

What is TRUE about government budget deficits and surpluses since 1940?

Gross public debt is the amount of funds that

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in Year 4?

Are federal budget deficits related to trade deficits?

A government budget surplus occurs during a budget year when

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 13: Deficit Spending and the Public Debt

What is TRUE about government budget deficits and surpluses since 1940?

Gross public debt is the amount of funds that

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in Year 4?

Are federal budget deficits related to trade deficits?

A government budget surplus occurs during a budget year when

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters