Question 1

What is an appropriate reason for the government to borrow money?

Accepted Answer

A) To compensate for a lower bond rating. 
B) To encourage foreign ownership of the debt. 
C) To inject new spending into the economy. 
D) To discourage waste in fiscal affairs. 
A) To compensate for a lower bond rating. 
B) To encourage foreign ownership of the debt. 
C) To inject new spending into the economy. 
D) To discourage waste in fiscal affairs.

Question 2

The national debt is the sum of the federal government's past budget deficits less its surpluses.

Accepted Answer

A) True 
 B)False

Question 3

What would be appropriate government action to close a recessionary gap?

Accepted Answer

A) Use policy to decrease aggregate supply. 
B) Use policy to decrease potential GDP. 
C) Use counter-cyclical fiscal policy to decrease aggregate demand. 
D) Use counter-cyclical fiscal policy to increase aggregate demand. 
A) Use policy to decrease aggregate supply. 
B) Use policy to decrease potential GDP. 
C) Use counter-cyclical fiscal policy to decrease aggregate demand. 
D) Use counter-cyclical fiscal policy to increase aggregate demand.

Question 4

Define the terms deficit and debt.Which is a flow concept and which is a stock concept?

Accepted Answer

A deficit is a shortfall of revenues und

Question 5

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What is the government's budget surplus or deficit?

Accepted Answer

A) A surplus of $30. 
B) A surplus of $10. 
C) A deficit of $30. 
D) A deficit of $10. 
A) A surplus of $30. 
B) A surplus of $10. 
C) A deficit of $30. 
D) A deficit of $10.

Question 6

What is meant by cyclically balanced budget fiscal policy?

Accepted Answer

A cyclically-balanced budget f

Question 7

-Refer to the graph above to answer this question.If this economy is experiencing a recessionary gap,which of the following could be correct?

Accepted Answer

A) Real GDP is Y1 and there is a budget deficit. 
B) Real GDP is Y1 and there is a budget surplus. 
C) Real GDP is Y2 and there is a balanced budget. 
D) Real GDP is Y1 and there is a balanced budget. 
A) Real GDP is Y1 and there is a budget deficit. 
B) Real GDP is Y1 and there is a budget surplus. 
C) Real GDP is Y2 and there is a balanced budget. 
D) Real GDP is Y1 and there is a balanced budget.

Question 8

Which of the following is a true statement in reference to the national debt?

Accepted Answer

A) As a percentage of GDP,it has steadily grown since World War II. 
B) As a percentage of GDP,it has decreased in recent years. 
C) It is almost entirely a result of World War II. 
D) It is now large enough for one to question the government's solvency. 
E) It is now growing at about $10 billion per year. 
A) As a percentage of GDP,it has steadily grown since World War II. 
B) As a percentage of GDP,it has decreased in recent years. 
C) It is almost entirely a result of World War II. 
D) It is now large enough for one to question the government's solvency. 
E) It is now growing at about $10 billion per year.

Question 9

Below is some data for a hypothetical economy:
  
-Refer to the information above to answer this question.What is the value of equilibrium income?

Accepted Answer

A) $583.33 
B) $675 
C) $700 
D) $720 
E) $780 
A) $583.33 
B) $675 
C) $700 
D) $720 
E) $780

Question 10

What is the meaning of the phrase: "the national debt is also a national credit"?

Accepted Answer

A) Only interest payments on the national debt constitute an economic burden. 
B) Official figures seriously understate the size of the national debt. 
C) What is owed must equal what is owned. 
D) The national debt is equal to the physical assets owned by the government. 
E) The national debt is a government debt held by the Bank of Canada and both of these are public institutions. 
A) Only interest payments on the national debt constitute an economic burden. 
B) Official figures seriously understate the size of the national debt. 
C) What is owed must equal what is owned. 
D) The national debt is equal to the physical assets owned by the government. 
E) The national debt is a government debt held by the Bank of Canada and both of these are public institutions.

Question 11

All of the following,except one,are reasons why Canada's national debt has grown.Which is the exception?

Accepted Answer

A) World War II. 
B) Building necessary infrastructure such as roads and bridges and the address a recessionary gap. 
C) Consistently falling tax revenue. 
D) Increased expenditures on income-support programs. 
A) World War II. 
B) Building necessary infrastructure such as roads and bridges and the address a recessionary gap. 
C) Consistently falling tax revenue. 
D) Increased expenditures on income-support programs.

Question 12

Below is some data for a hypothetical economy:
  
-Refer to the information above to answer this question.At equilibrium GDP,what is the value of the budget surplus/deficit?

Accepted Answer

A) -130 
B) 20 
C) +20 
D) 0 
A) -130 
B) 20 
C) +20 
D) 0

Question 13

Distinguish between a government's internal and external debt.

Accepted Answer

The domestic portion of the Go

Question 14

Which of the following statements best illustrates a cyclically balanced-budget fiscal policy?

Accepted Answer

A) The budget should be balanced each budget year. 
B) The budget should always balance. 
C) The life of the business cycle is the appropriate time period to attempt to balance the budget. 
D) Fiscal policy really has nothing to do with the budget. 
E) A balanced budget is the only appropriate fiscal policy. 
A) The budget should be balanced each budget year. 
B) The budget should always balance. 
C) The life of the business cycle is the appropriate time period to attempt to balance the budget. 
D) Fiscal policy really has nothing to do with the budget. 
E) A balanced budget is the only appropriate fiscal policy.

Question 15

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What are net tax revenues?

Accepted Answer

A) -$10. 
B) +$30. 
C) +$70. 
D) +$90. 
A) -$10. 
B) +$30. 
C) +$70. 
D) +$90.

Question 16

Which of the following is a correct statement about the federal government's budget?

Accepted Answer

A) It has been in a deficit continuously since the 1960s. 
B) It has been in a surplus continuously since the 1960s. 
C) It has been in a deficit in the last few years after decades of surpluses. 
D) It has been in a surplus in the last few years after decades of deficits. 
A) It has been in a deficit continuously since the 1960s. 
B) It has been in a surplus continuously since the 1960s. 
C) It has been in a deficit in the last few years after decades of surpluses. 
D) It has been in a surplus in the last few years after decades of deficits.

Question 17

How can an inflationary gap be closed?

Accepted Answer

A) By an increase in aggregate demand. 
B) By an increase in government spending. 
C) By an increase in the price level. 
D) By an increase in taxes. 
E) By a decrease in aggregate supply. 
A) By an increase in aggregate demand. 
B) By an increase in government spending. 
C) By an increase in the price level. 
D) By an increase in taxes. 
E) By a decrease in aggregate supply.

Question 18

-Refer to the graph above to answer this question.What do both de and ij represent?

Accepted Answer

A) An inflationary gap. 
B) A recessionary gap. 
C) A budget surplus. 
D) A budget deficit. 
A) An inflationary gap. 
B) A recessionary gap. 
C) A budget surplus. 
D) A budget deficit.

Question 19

Given the following parameters for the economy of New Temple:
   Suppose the government is required by law to maintain a balanced budget.
a)What is the value of equilibrium income?
b)What is the value of G at equilibrium income?
c)What is the value of the multiplier?

Accepted Answer

The answer of Given the following parameters for the economy...

Question 20

-Refer to the graph above to answer this question.What does this graph indicate?

Accepted Answer

A) That Y1,Y2 and Y3 could all be equilibrium levels of real GDP. 
B) That Y2 is the equilibrium level of real GDP. 
C) That government spending and the size of the budget surplus or deficit are unrelated. 
D) That net tax revenues depend on tax rates but not on the level of real GDP. 
E) That the budget line is unrelated to NTR. 
A) That Y1,Y2 and Y3 could all be equilibrium levels of real GDP. 
B) That Y2 is the equilibrium level of real GDP. 
C) That government spending and the size of the budget surplus or deficit are unrelated. 
D) That net tax revenues depend on tax rates but not on the level of real GDP. 
E) That the budget line is unrelated to NTR.

What is an appropriate reason for the government to borrow money?

The national debt is the sum of the federal government's past budget deficits less its surpluses.

What would be appropriate government action to close a recessionary gap?

Define the terms deficit and debt.Which is a flow concept and which is a stock concept?

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What is the government's budget surplus or deficit?

What is meant by cyclically balanced budget fiscal policy?

-Refer to the graph above to answer this question.If this economy is experiencing a recessionary gap,which of the following could be correct?

Which of the following is a true statement in reference to the national debt?

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.What is the value of equilibrium income?

What is the meaning of the phrase: "the national debt is also a national credit"?

All of the following,except one,are reasons why Canada's national debt has grown.Which is the exception?

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.At equilibrium GDP,what is the value of the budget surplus/deficit?

Distinguish between a government's internal and external debt.

Which of the following statements best illustrates a cyclically balanced-budget fiscal policy?

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What are net tax revenues?

Which of the following is a correct statement about the federal government's budget?

How can an inflationary gap be closed?

-Refer to the graph above to answer this question.What do both de and ij represent?

Given the following parameters for the economy of New Temple: Suppose the government is required by law to maintain a balanced budget. a)What is the value of equilibrium income? b)What is the value of G at equilibrium income? c)What is the value of the multiplier?

-Refer to the graph above to answer this question.What does this graph indicate?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters

Exam 7: Fiscal Policy

What is an appropriate reason for the government to borrow money?

The national debt is the sum of the federal government's past budget deficits less its surpluses.

What would be appropriate government action to close a recessionary gap?

Define the terms deficit and debt.Which is a flow concept and which is a stock concept?

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What is the government's budget surplus or deficit?

What is meant by cyclically balanced budget fiscal policy?

-Refer to the graph above to answer this question.If this economy is experiencing a recessionary gap,which of the following could be correct?

Which of the following is a true statement in reference to the national debt?

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.What is the value of equilibrium income?

What is the meaning of the phrase: "the national debt is also a national credit"?

All of the following,except one,are reasons why Canada's national debt has grown.Which is the exception?

Below is some data for a hypothetical economy: -Refer to the information above to answer this question.At equilibrium GDP,what is the value of the budget surplus/deficit?

Distinguish between a government's internal and external debt.

Which of the following statements best illustrates a cyclically balanced-budget fiscal policy?

Suppose that the government's total tax receipts are $130,government spending on goods and services is $100 and transfer payments are $40.What are net tax revenues?

Which of the following is a correct statement about the federal government's budget?

How can an inflationary gap be closed?

-Refer to the graph above to answer this question.What do both de and ij represent?

Given the following parameters for the economy of New Temple: Suppose the government is required by law to maintain a balanced budget. a)What is the value of equilibrium income? b)What is the value of G at equilibrium income? c)What is the value of the multiplier?

-Refer to the graph above to answer this question.What does this graph indicate?

The Economic Problem

Demand and Supply: an Introduction

Measuring the Economy 1: GDP and Economic Growth

Measuring the Economy 2: Unemployment and Inflation

Aggregate Demand and Supply

Aggregate Expenditures

Money and Banking

The Money Market and Monetary Policy

International Trade

Exchange Rates and the Balance of Payments

Macroeconomic Policy Revisited

A Walk Through the Twentieth Century and Beyond

Filters