Exam 13: Federal Budgets and Public Policy

It took more than 200 years for the federal debt to reach $1 trillion and then only an additional 30 years to increase seven fold.

A major foreign holder of U.S.Treasury securities is

The key link between the so-called twin deficits involves

One rationale for the sizable wartime deficits run by the U.S.government is that the alternative to defending the country from an aggressor may involve substantial long-term costs.

A fuller picture of government's role in the economy includes state and local governments.

Government purchases of goods and services are not included in the government budget deficit but are included in the government purchases component of GDP.

The long-run opportunity cost of government spending's crowding out of private investment

If government budgets were required to be annually balanced,

With few exceptions,the U.S.federal government has historically run a balanced budget.

The debt ceiling is a limit on the total amount of money the federal government can legally borrow.

Crowding out occurs by

Problems with the federal government budget process include

The beginning of the formal budget process is signified by

The Social Security program

When a budget is not approved in time for continued agency operation,

A federal capital budget would include spending on buildings,highways,computers,and military equipment.

With few exceptions,the U.S.federal government has historically run a deficit.

If the federal government budget deficit increases,then interest rates will __________,the U.S.dollar will __________,and the foreign trade deficit will __________.

The share of __________ in total federal outlays will likely __________ as interest rates __________ from historic lows of recent years.

Federal budget deficits grow during recessions because