Question 1

The budget deficit/surplus projections for 2005 that were made in 2000 were wrong because there was an

Accepted Answer

A) unanticipated increase in defense spending. 
B) unanticipated increase in interest rates. 
C) anticipated increase in immigration. 
D) anticipated increase in defense spending. 
A) unanticipated increase in defense spending. 
B) unanticipated increase in interest rates. 
C) anticipated increase in immigration. 
D) anticipated increase in defense spending.

Question 2

In which of the time periods below was the surplus as a percentage of GDP the largest?

Accepted Answer

A) Late 1940s. 
B) Late 1960s. 
C) Late 1980s. 
D) Late 1990s. 
A) Late 1940s. 
B) Late 1960s. 
C) Late 1980s. 
D) Late 1990s.

Question 3

An argument has been made that the shrinking deficits of the 1990s were attributable to the

Accepted Answer

A) Cold War. 
B) Gulf War. 
C) bailout of the savings and loans. 
D) peace dividend that resulted from the end of the Cold War. 
A) Cold War. 
B) Gulf War. 
C) bailout of the savings and loans. 
D) peace dividend that resulted from the end of the Cold War.

Question 4

The pattern of the 1930s through the middle 1990s was

Accepted Answer

A) deficits interspersed with a few years of surplus. 
B) deficits each and every year. 
C) surpluses each and every year. 
D) surpluses interspersed with a few years of deficits. 
A) deficits interspersed with a few years of surplus. 
B) deficits each and every year. 
C) surpluses each and every year. 
D) surpluses interspersed with a few years of deficits.

Question 5

As a percentage of GDP the national debt consistently

Accepted Answer

A) rose from 1950 to 1975. 
B) rose from 1950 to 1960 but not thereafter. 
C) fell from 1950 to 1975. 
D) fell from 1950 until 1990. 
A) rose from 1950 to 1975. 
B) rose from 1950 to 1960 but not thereafter. 
C) fell from 1950 to 1975. 
D) fell from 1950 until 1990.

Question 6

A peace dividend

Accepted Answer

A) results from the reduction in defense spending as a war is concluded. 
B) results from making the defeated enemy pay war reparations. 
C) never materialized after the Cold War. 
D) never materialized after World War II. 
A) results from the reduction in defense spending as a war is concluded. 
B) results from making the defeated enemy pay war reparations. 
C) never materialized after the Cold War. 
D) never materialized after World War II.

Question 7

In which of the periods below was the deficit as a percentage of GDP the largest?

Accepted Answer

A) The 1950s. 
B) The 1960s. 
C) The 1980s. 
D) In 2009-2011. 
A) The 1950s. 
B) The 1960s. 
C) The 1980s. 
D) In 2009-2011.

Question 8

On the notion of the Balanced Budget Amendment, economists are

Accepted Answer

A) apathetic. 
B) unanimously in favor of a rigid requirement of budget balance. 
C) unanimously against a rigid requirement of budget balance. 
D) mostly against a rigid requirement of budget balance. 
A) apathetic. 
B) unanimously in favor of a rigid requirement of budget balance. 
C) unanimously against a rigid requirement of budget balance. 
D) mostly against a rigid requirement of budget balance.

Question 9

A budget surplus is the

Accepted Answer

A) amount by which revenues exceed expenditures. 
B) total amount owed by the federal government. 
C) amount by which revenues fall short of projections. 
D) amount by which expenditures exceed revenues. 
A) amount by which revenues exceed expenditures. 
B) total amount owed by the federal government. 
C) amount by which revenues fall short of projections. 
D) amount by which expenditures exceed revenues.

Question 10

The portion of US debt owned by the Federal Reserve

Accepted Answer

A) Dropped quickly from 2010 to 2015 from a peak in the 2010 
B) continues to rise 
C) dropped to an all-time low in 2015 
D) rose from around 6% to around 12% as a result of the Great Recession 
A) Dropped quickly from 2010 to 2015 from a peak in the 2010 
B) continues to rise 
C) dropped to an all-time low in 2015 
D) rose from around 6% to around 12% as a result of the Great Recession

Question 11

In which of the periods below was the inflation-adjusted deficit largest?

Accepted Answer

A) The 1950s. 
B) The 1960s. 
C) The 1980s. 
D) In 2009-2011. 
A) The 1950s. 
B) The 1960s. 
C) The 1980s. 
D) In 2009-2011.

Question 12

The amount of US debt owned by the English

Accepted Answer

A) Dropped from the 1940s through the 1970s, spiked in the 1980s, dropped in the 1990s and early 2000, and rose in the 2010s 
B) continues to rise 
C) dropped to an all-time low in 2015 
D) has remained relatively low and constant (relative to other countries) 
A) Dropped from the 1940s through the 1970s, spiked in the 1980s, dropped in the 1990s and early 2000, and rose in the 2010s 
B) continues to rise 
C) dropped to an all-time low in 2015 
D) has remained relatively low and constant (relative to other countries)

Question 13

Functional finance is that part of the deficit that is attributable to

Accepted Answer

A) specific programs (like Medicare). 
B) the exponential increase in interest rates. 
C) spending programs or tax cuts passed to stimulate an economy in recession. 
D) fighting the war on terror. 
A) specific programs (like Medicare). 
B) the exponential increase in interest rates. 
C) spending programs or tax cuts passed to stimulate an economy in recession. 
D) fighting the war on terror.

Question 14

In which of the decades below was the inflation-adjusted deficit largest?

Accepted Answer

A) The 1950s. 
B) The 1960s. 
C) The 1970s. 
D) The 1980s. 
A) The 1950s. 
B) The 1960s. 
C) The 1970s. 
D) The 1980s.

Question 15

Which of the following programs is off-budget?

Accepted Answer

A) Interest on the debt. 
B) Defense. 
C) Medicare. 
D) Student loans. 
A) Interest on the debt. 
B) Defense. 
C) Medicare. 
D) Student loans.

Question 16

Between 2001 and the financial collapse of 2008, U.S. federal budget deficits hovered around

Accepted Answer

A) zero. 
B) $150 billion. 
C) $400 billion. 
D) $800 billion. 
A) zero. 
B) $150 billion. 
C) $400 billion. 
D) $800 billion.

Exam 12: Federal Deficits, Surpluses, and the National Debt

The budget deficit/surplus projections for 2005 that were made in 2000 were wrong because there was an

In which of the time periods below was the surplus as a percentage of GDP the largest?

An argument has been made that the shrinking deficits of the 1990s were attributable to the

The pattern of the 1930s through the middle 1990s was

As a percentage of GDP the national debt consistently

A peace dividend

In which of the periods below was the deficit as a percentage of GDP the largest?

On the notion of the Balanced Budget Amendment, economists are

A budget surplus is the

The portion of US debt owned by the Federal Reserve

In which of the periods below was the inflation-adjusted deficit largest?

The amount of US debt owned by the English

Functional finance is that part of the deficit that is attributable to

In which of the decades below was the inflation-adjusted deficit largest?

Which of the following programs is off-budget?

Between 2001 and the financial collapse of 2008, U.S. federal budget deficits hovered around

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