Enter your answer to each of the questions in the blank to the left of the question. Be sure to use lowercase letters only!
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1. Which of the following occurs when all taxes and other revenues exceed government expenditures for a year?
a. budget surplus
b. balanced budget
c. budget deficit
d. government debt
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2. Which of the following describes the situation where revenues and expenditures are equal during a given period?
a. budget surplus
b. balanced budget
c. budget deficit
d. government debt
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3. Which of the following exists when expenditures exceed revenue from taxes?
a. budget surplus
b. balanced budget
c. budget deficit
d. government debt
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4. Which of the following consists of the total or accumulated borrowings by the government?
a. budget surplus
b. balanced budget
c. budget deficit
d. government debt
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5. Which of the following refers to the use of taxes and public expenditures to help dampen the swings associated with the business cycle?
a. monetary policy
b. fiscal policy
c. balanced budget
d. government debt
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6. Which of the following records the actual dollar expenditures, revenues, and deficits in a given period?
a. actual budget
b. structural budget
c. cyclical budget
d. none of the above.
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7. Which of the following calculates what government revenues, expenditures, and deficits would be if the economy were operating at potential output?
a. actual budget
b. structural budget
c. cyclical budget
d. none of the above.
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8. Which of the following is the difference between the actual budget and the structural budget?
a. actual budget
b. structural budget
c. cyclical budget
d. none of the above.
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9. An increase in the _______ deficit, coming through tax cuts or higher government spending, will tend to _______ interest rates, reduce domestic investment, and _______ the trade deficit.
a. applied; increase; reduce
b. structural; decrease; decrease
c. structural; increase; reduce
d. structural; increase; increase
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10. When government spending reduces private investment, we call that:
a. dividing-up
b. summing-up
c. pushing-out
d. crowding-out
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11. A large government debt tends to _______ the growth in potential output because it displaces private capital, _______ the inefficiency from taxation, and forces a nation to _______ consumption to service its foreign borrowing.
a. reduce; reduces; reduce
b. increase; increases; reduce
c. reduce; increases; reduce
d. increase; increases; increase
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12. What do we call the announcement of official target ranges for the inflation rate along with an explicit statement that low and stable inflation is the overriding goal of monetary policy?
a. inflation targeting
b. policy targeting
c. inflation ranging
d. none of the above
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