Question 1

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in 2016?

Accepted Answer

A)  1.7 percent 
B)  2.0 percent 
C)  7.7 percent 
D)  5.9 percent 
A)  1.7 percent 
B)  2.0 percent 
C)  7.7 percent 
D)  5.9 percent

Question 2

When government spending is less than the tax revenues during a specific time period, this is known as a

Accepted Answer

A)  government budget deficit. 
B)  government budget surplus. 
C)  balanced budget. 
D)  public debt. 
A)  government budget deficit. 
B)  government budget surplus. 
C)  balanced budget. 
D)  public debt.

Question 3

Which government program would be considered an "entitlement" program?

Accepted Answer

A)  national defense 
B)  subsidies for mass transportation 
C)  law enforcement in major U.S. cities 
D)  Social Security 
A)  national defense 
B)  subsidies for mass transportation 
C)  law enforcement in major U.S. cities 
D)  Social Security

Question 4

How does the federal government finance a budget deficit?

Accepted Answer

A)  It redeems its IOUs. 
B)  It purchases U.S. Treasury bonds. 
C)  It cuts spending on entitlement programs. 
D)  It borrows funds by selling Treasury bonds. 
A)  It redeems its IOUs. 
B)  It purchases U.S. Treasury bonds. 
C)  It cuts spending on entitlement programs. 
D)  It borrows funds by selling Treasury bonds.

Question 5

If foreign residents buy U.S. Treasury securities to finance the budget deficit, then which of the following will likely occur?

Accepted Answer

A)  an increase in the trade deficit 
B)  a decrease in the trade deficit 
C)  there will be a trade balance 
D)  a reduction in the public debt 
A)  an increase in the trade deficit 
B)  a decrease in the trade deficit 
C)  there will be a trade balance 
D)  a reduction in the public debt

Question 6

All of the following are possible explanations for the increase in U.S. government budget deficits as a percentage of GDP since 2000 EXCEPT

Accepted Answer

A)  increases in tax revenues. 
B)  increases in payments for entitlements. 
C)  increases in government spending. 
D)  decreases in tax rates. 
A)  increases in tax revenues. 
B)  increases in payments for entitlements. 
C)  increases in government spending. 
D)  decreases in tax rates.

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in 2016?

When government spending is less than the tax revenues during a specific time period, this is known as a

Which government program would be considered an "entitlement" program?

How does the federal government finance a budget deficit?

If foreign residents buy U.S. Treasury securities to finance the budget deficit, then which of the following will likely occur?

All of the following are possible explanations for the increase in U.S. government budget deficits as a percentage of GDP since 2000 EXCEPT

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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 14: Deficit Spending and the Public Debt

-Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in 2016?

When government spending is less than the tax revenues during a specific time period, this is known as a

Which government program would be considered an "entitlement" program?

How does the federal government finance a budget deficit?

If foreign residents buy U.S. Treasury securities to finance the budget deficit, then which of the following will likely occur?

All of the following are possible explanations for the increase in U.S. government budget deficits as a percentage of GDP since 2000 EXCEPT

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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters