Question 1

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," by the year 2075, spending on entitlement programs will be about:

Accepted Answer

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," by the year 2075, spending on entitlement programs such as Social Security, Medicare, and Medicaid will be about 21 percent of GDP.

Question 2

When ________ hold(s), if the present value of government is held constant, budget deficits will not crowd out investment.

Accepted Answer

The answer of When ________ hold(s), if the present value...

Question 3

If domestic saving is less than domestic investment, then investment can be financed by:

Accepted Answer

If domestic saving is less than domestic investment, then investment can be financed by foreign saving, i.e. borrowing from other countries.

Question 4

The national income identity can be rearranged to show that ________ equals ________.

Accepted Answer

The national income identity can be rearranged to show that the sum of private saving, government saving, and foreign saving equals investment. This reflects the sources of funds available for investment in an economy.

Question 5

If domestic saving is less than domestic investment, then investment is financed by:

Accepted Answer

When domestic saving is less than domestic investment, the difference can be financed by foreign saving. This is often in the form of borrowing from other countries or foreign direct investment. Higher interest rates could be a possible outcome, but this is not the only or the most common way in which investment is financed in this situation. Printing more money or using an inflation tax can lead to inflation and have negative consequences for the economy.

Question 6

Income minus taxes is often called:

Accepted Answer

Income minus taxes is typically referred to as disposable income, which is not listed among the options provided.

Question 7

The difference between imports and exports is:

Accepted Answer

The answer of The difference between imports and exports is:
...

Question 8

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to ________ by the year ________, assuming current federal government spending patterns.

Accepted Answer

The answer of According to the Congressional Budget Office report...

Question 9

Income minus taxes is often called:

Accepted Answer

Disposable income refers to the money that is left over after taxes have been deducted from a person's gross income. It is the amount of money that a person has available to spend or save after paying their taxes.

Question 10

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," Medicare, Medicaid, and social security will be about ________ percent of GDP in 2030.

Accepted Answer

According to the Congressional Budget Office report, Medicare, Medicaid, and social security will be about 15 percent of GDP in 2030.

Question 11

Which country has the highest share of medical expenses to GDP?

Accepted Answer

The United States has the highest share of medical expenses to GDP compared to the other options. In 2019, the United States spent approximately 17% of its GDP on healthcare. This is significantly higher than the other options, such as Germany at 11.2%, France at 11.2%, the United Kingdom at 9.8%, and Japan at 10.9%.

Question 12

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the main culprit(s) for the increase in federal government spending to about 40 percent of GDP in 2075 is/are:

Accepted Answer

According to the Congressional Budget Office report, Medicare, Medicaid, and Social Security are all major drivers for the increase in federal government spending, accounting for most of the projected growth in federal spending through 2075. Therefore, the correct answer is D, All of these answers are correct.

Question 13

________ is/are what may happen when the central government needs to borrow to finance its deficit to the detriment of private firms.

Accepted Answer

When the central government needs to borrow to finance its deficit, it will typically issue bonds which will attract investors. This increased demand for bonds will drive up interest rates, which can crowd out private firms from borrowing money as they will not be able to compete with the higher interest rates that the government is offering. This can lead to a decrease in private investment and can ultimately hurt economic growth.

Question 14

The CBO forecasts that the number of workers per retiree in the social security program will ________ from ________ to ________ in the coming decades.

Accepted Answer

The CBO forecasts that the number of workers per retiree in the social security program will fall from 3.3 to 2 in the coming decades.

Question 15

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the share of government spending in GDP will ________, assuming current federal government spending patterns.

Accepted Answer

According to the Congressional Budget Office report, the share of government spending in GDP will climb to 40 percent by 2075, assuming current federal government spending patterns.

Question 16

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the share of federal government spending in GDP will climb to 40 percent by 2075, assuming:

Accepted Answer

The report assumes that current policies stay in place, which means that government spending will continue to increase in the future without significant changes in the structure of the federal budget or changes in economic conditions. This is the factor that leads to the projected increase in the share of federal government spending in GDP to 40 percent by 2075.

Question 17

Which of the following is/are possible explanation(s) for rising health care expenditures?

Accepted Answer

The answer of Which of the following is/are possible explanation(s)...

Question 18

If the government increases its budget deficit, ________ is/are ameliorated if the economy has access to ________.

Accepted Answer

Crowding out, which refers to the reduction in private investment due to increased government borrowing, can be ameliorated if the economy has access to foreign savings. This is because the influx of foreign capital can help finance the government's deficit without taking away from domestic investment funds.

Question 19

The system used for the social security program is called:

Accepted Answer

The social security program operates on a pay-as-you-go system, where current workers' contributions are used to pay benefits to current retirees.

Question 20

________ imply/implies that, holding the present value of government spending constant, budget deficits will not crowd out investment.

Accepted Answer

Ricardian equivalence implies that individuals will anticipate future tax increases to pay for current deficits, therefore offsetting any potential crowding out effect on investment. This means that holding government spending constant, budget deficits will not have a significant effect on investment, as individuals will save more to compensate for expected future tax increases.

Quiz 18: The Government and the Macroeconomy

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," by the year 2075, spending on entitlement programs will be about:

When ________ hold(s) , if the present value of government is held constant, budget deficits will not crowd out investment.

If domestic saving is less than domestic investment, then investment can be financed by:

The national income identity can be rearranged to show that equals .

If domestic saving is less than domestic investment, then investment is financed by:

Income minus taxes is often called:

The difference between imports and exports is:

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," government revenues are projected to by the year , assuming current federal government spending patterns.

Income minus taxes is often called:

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," Medicare, Medicaid, and social security will be about ________ percent of GDP in 2030.

Which country has the highest share of medical expenses to GDP?

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the main culprit(s) for the increase in federal government spending to about 40 percent of GDP in 2075 is/are:

________ is/are what may happen when the central government needs to borrow to finance its deficit to the detriment of private firms.

The CBO forecasts that the number of workers per retiree in the social security program will from to in the coming decades.

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the share of government spending in GDP will ________, assuming current federal government spending patterns.

According to the Congressional Budget Office report "A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075," the share of federal government spending in GDP will climb to 40 percent by 2075, assuming:

Which of the following is/are possible explanation(s) for rising health care expenditures?

If the government increases its budget deficit, is/are ameliorated if the economy has access to .

The system used for the social security program is called:

________ imply/implies that, holding the present value of government spending constant, budget deficits will not crowd out investment.