Question 1

A continuing resolution is

Accepted Answer

A) an annual determination on the part of Congress to improve the budget process 
B) a decision to maintain a specific spending level for five years 
C) a temporary extension of spending authority into the new fiscal year 
D) the official name for the entire budget package when it is finally enacted 
E) the result of a budget surplus 
A) an annual determination on the part of Congress to improve the budget process 
B) a decision to maintain a specific spending level for five years 
C) a temporary extension of spending authority into the new fiscal year 
D) the official name for the entire budget package when it is finally enacted 
E) the result of a budget surplus

Question 2

What has been the practical effect on macroeconomic policy of the huge U.S.federal budget deficits of the 1980s?

Accepted Answer

A) The automatic stabilizers no longer functioned. 
B) It was tough gaining support to cut taxes or raise government purchases of goods and services during cyclical downturns. 
C) Monetary policy has become less useful than fiscal policy because the deficits are so large that they have a greater impact than the money supply. 
D) There has been more emphasis on fine-tuning the economy than there was previously. 
E) There is now a consensus among economists that a balanced budget amendment should be adopted. 
A) The automatic stabilizers no longer functioned. 
B) It was tough gaining support to cut taxes or raise government purchases of goods and services during cyclical downturns. 
C) Monetary policy has become less useful than fiscal policy because the deficits are so large that they have a greater impact than the money supply. 
D) There has been more emphasis on fine-tuning the economy than there was previously. 
E) There is now a consensus among economists that a balanced budget amendment should be adopted.

Question 3

If for every dollar increase in farm subsidies the government decreased urban welfare payments by a dollar,we would expect the net effect to be

Accepted Answer

A) an increase in the budget deficit because government spending has increased 
B) a decrease in the budget deficit because transfer payments are not included in the government's budget 
C) an increase in the budget deficit because transfer payments have increased 
D) an increase in the budget deficit because farm subsidies are transfer payments but urban welfare payments are not 
E) no change in the budget deficit 
A) an increase in the budget deficit because government spending has increased 
B) a decrease in the budget deficit because transfer payments are not included in the government's budget 
C) an increase in the budget deficit because transfer payments have increased 
D) an increase in the budget deficit because farm subsidies are transfer payments but urban welfare payments are not 
E) no change in the budget deficit

Question 4

The U.S.government's fiscal year covers from

Accepted Answer

A) January through December 
B) April of one year through March of the next year 
C) June of one year through May of the next year 
D) September of one year through August of the next year 
E) October of one year through September of the next year 
A) January through December 
B) April of one year through March of the next year 
C) June of one year through May of the next year 
D) September of one year through August of the next year 
E) October of one year through September of the next year

Question 5

Problems with the federal government budget process include

Accepted Answer

A) Congress having to make tough choices each year on which entitlement programs,if any,will receive full support and how much partial support all others will receive 
B) the constitutional requirement that Congress balance the budget on an annual basis 
C) an overly detailed budget that allows Congress to reward friends,thereby discouraging restraint on spending 
D) a speedy process that causes errors that are expensive to correct 
E) continuing resolutions that force Congress to face tough budgetary decisions in a timely manner 
A) Congress having to make tough choices each year on which entitlement programs,if any,will receive full support and how much partial support all others will receive 
B) the constitutional requirement that Congress balance the budget on an annual basis 
C) an overly detailed budget that allows Congress to reward friends,thereby discouraging restraint on spending 
D) a speedy process that causes errors that are expensive to correct 
E) continuing resolutions that force Congress to face tough budgetary decisions in a timely manner

Question 6

More than 40 percent of the publicly held U.S.federal debt is held by foreign individuals and corporations.

Accepted Answer

A) True 
 B)False

Question 7

In Keynes' philosophy of government budgets,

Accepted Answer

A) permanent deficits are desirable 
B) permanent surpluses are desirable 
C) the goal is to have a budget surplus 
D) surpluses are appropriate during expansions 
E) deficits are appropriate during expansions 
A) permanent deficits are desirable 
B) permanent surpluses are desirable 
C) the goal is to have a budget surplus 
D) surpluses are appropriate during expansions 
E) deficits are appropriate during expansions

Question 8

Approximately what percentage of the U.S.federal budget was used for Social Security payments (on the national debt)in 2012?

Accepted Answer

A) 5 percent 
B) 10 percent 
C) 14 percent 
D) 20 percent 
E) 40 percent 
A) 5 percent 
B) 10 percent 
C) 14 percent 
D) 20 percent 
E) 40 percent

Question 9

The federal government's fiscal year

Accepted Answer

A) is less than a calendar year in length 
B) runs from October 1 to September 30 
C) runs from January 1 to December 31 
D) is actually 15 months in length 
E) none of the above 
A) is less than a calendar year in length 
B) runs from October 1 to September 30 
C) runs from January 1 to December 31 
D) is actually 15 months in length 
E) none of the above

Question 10

Since 1960 the federal budget has been in surplus in only 9 years.

Accepted Answer

A) True 
 B)False

Question 11

During a recession,higher welfare outlays

Accepted Answer

A) increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy 
B) decrease the size of the budget deficit regardless of the government's discretionary fiscal policy 
C) increase the size of the budget deficit only if the government undertakes discretionary fiscal policy 
D) decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy 
E) have the same effect on the budget deficit as they do in times of expansion 
A) increase the size of the budget deficit even if the government does not undertake discretionary fiscal policy 
B) decrease the size of the budget deficit regardless of the government's discretionary fiscal policy 
C) increase the size of the budget deficit only if the government undertakes discretionary fiscal policy 
D) decrease the size of the budget deficit only if the government undertakes discretionary fiscal policy 
E) have the same effect on the budget deficit as they do in times of expansion

Question 12

The US government can continue to run a deficit as long as lenders are willing to lend money to the government.

Accepted Answer

A) True 
 B)False

Question 13

If discretionary fiscal policy creates a federal budget deficit,the economy must be experiencing falling output.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is true of an annually balanced federal budget?

Accepted Answer

A) Most economists agree that the federal government should balance its budget just as each household must do. 
B) Such a policy would require government to increase its spending when tax receipts fell. 
C) Such a policy became popular between the 1930s and 1960s. 
D) Such a policy would guarantee that the economy always remained at its potential level. 
E) Such a policy could worsen a contractionary gap. 
A) Most economists agree that the federal government should balance its budget just as each household must do. 
B) Such a policy would require government to increase its spending when tax receipts fell. 
C) Such a policy became popular between the 1930s and 1960s. 
D) Such a policy would guarantee that the economy always remained at its potential level. 
E) Such a policy could worsen a contractionary gap.

Question 15

The Council of Economic Advisers was created by

Accepted Answer

A) the same legislation which created the Federal Reserve Board 
B) President John F.Kennedy 
C) the Employment Act of 1946 
D) the Office of Management and Budget 
E) Congress in 1921 
A) the same legislation which created the Federal Reserve Board 
B) President John F.Kennedy 
C) the Employment Act of 1946 
D) the Office of Management and Budget 
E) Congress in 1921

Question 16

A possible budget reform is

Accepted Answer

A) a quadrennial budget 
B) breaking down the budget into increasingly small budget lines 
C) appointing agency heads with different priorities than those of elected representatives 
D) a biennial budget 
E) eliminating the operating budget 
A) a quadrennial budget 
B) breaking down the budget into increasingly small budget lines 
C) appointing agency heads with different priorities than those of elected representatives 
D) a biennial budget 
E) eliminating the operating budget

Question 17

If the US government defaults on its debt payment it could have a big impact on the world eonomy.Which of the following would not be a likely impact?

Accepted Answer

A) cost of borrowing for US would increase 
B) market interest rates in the US would increase 
C) mortgage interest rates would increase 
D) unemployment would increase 
E) the federal deficit would decline 
A) cost of borrowing for US would increase 
B) market interest rates in the US would increase 
C) mortgage interest rates would increase 
D) unemployment would increase 
E) the federal deficit would decline

Question 18

Because of automatic stabilizers,government budget deficits are

Accepted Answer

A) positive during both expansions and contractions 
B) negative during both expansions and contractions 
C) zero if averaged out over the entire business cycle 
D) larger during expansions and smaller during contractions 
E) smaller during expansions and larger during contractions 
A) positive during both expansions and contractions 
B) negative during both expansions and contractions 
C) zero if averaged out over the entire business cycle 
D) larger during expansions and smaller during contractions 
E) smaller during expansions and larger during contractions

Question 19

Bigger government budget deficits may be expected to increase interest rates because

Accepted Answer

A) all of the following 
B) prices increase 
C) output increases 
D) the demand for money increases as income increases 
E) the government is selling more securities 
A) all of the following 
B) prices increase 
C) output increases 
D) the demand for money increases as income increases 
E) the government is selling more securities

Question 20

The annual Economic Report of the President is written by

Accepted Answer

A) the President 
B) Congress 
C) the Office of Management and Budget 
D) the Council of Economic Advisers 
E) the Secretary of the Treasury 
A) the President 
B) Congress 
C) the Office of Management and Budget 
D) the Council of Economic Advisers 
E) the Secretary of the Treasury

Exam 13: Federal Budgets and Public Policy

A continuing resolution is

What has been the practical effect on macroeconomic policy of the huge U.S.federal budget deficits of the 1980s?

If for every dollar increase in farm subsidies the government decreased urban welfare payments by a dollar,we would expect the net effect to be

The U.S.government's fiscal year covers from

Problems with the federal government budget process include

More than 40 percent of the publicly held U.S.federal debt is held by foreign individuals and corporations.

In Keynes' philosophy of government budgets,

Approximately what percentage of the U.S.federal budget was used for Social Security payments (on the national debt)in 2012?

The federal government's fiscal year

Since 1960 the federal budget has been in surplus in only 9 years.

During a recession,higher welfare outlays

The US government can continue to run a deficit as long as lenders are willing to lend money to the government.

If discretionary fiscal policy creates a federal budget deficit,the economy must be experiencing falling output.

Which of the following is true of an annually balanced federal budget?

The Council of Economic Advisers was created by

A possible budget reform is

If the US government defaults on its debt payment it could have a big impact on the world eonomy.Which of the following would not be a likely impact?

Because of automatic stabilizers,government budget deficits are

Bigger government budget deficits may be expected to increase interest rates because

The annual Economic Report of the President is written by

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Economic Decision Makers

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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