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Macroeconomics Principles and Policy Study Set 1

Business

Quiz 16 :

Budget Deficits In The Short and Long Run

Quiz 16 :

Budget Deficits In The Short and Long Run

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Because of the recessions in 1983 and 1991,the structural deficit was far larger than the actual deficit in those years.
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True False
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Answer:

False

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In 2010,the net national debt was about $9 trillion or approximately $29,000 per person.
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True False
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Answer:

True

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If a balanced budget were required in 2008,the government would have been required to cut spending and increase taxes.
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True False
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Answer:

True

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The structural deficit is extremely sensitive to the performance of the economy.
True False
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The federal budget deficit in 2009 was more than eight times larger than the deficit in 2007.
True False
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In 2010 and 2011,President Obama advocated deficit reduction through decreased spending while Republicans in Congress advocated increased taxation to achieve the same goal.
True False
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Economic principles suggest that we should focus on balancing the budget rather than balancing aggregate supply and aggregate demand.
True False
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The official fiscal year budget deficits disappeared from 1998 to 2001.
True False
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Expansionary fiscal policy normally lowers interest rates.
True False
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Although a balanced budget may be appropriate under one monetary policy,a deficit or surplus may be appropriate under a different monetary policy.
True False
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Both Social Security expenditures and the payroll tax receipts that finance them are treated as off-budget items.
True False
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Deficits are created by governments running a large debt.
True False
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The budget deficit is the amount by which a government's expenditures exceed its receipts.
True False
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The structural deficit is determined by established expenditure-transfer policies and tax rates and is independent of the current level of GDP.
True False
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In 2010,many politicians argued that the deficit should be reduced at all costs but many economists countered that deficit reduction would be problematic given the state of the economy.
True False
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Like the debt of many families,the national debt in 2014 was many times larger than the national income.
True False
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The actual deficit is a poor measure of the government fiscal policy because it changes independently of intentional government policies.
True False
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As GDP falls,automatic stabilizers run the federal budget in a deficit direction.
True False
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At levels of GDP above full employment,the federal budget would usually be in a deficit position.
True False
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The structural deficit can be used to estimate the thrust of current fiscal policy.
True False
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