MCQ Questions
Q.1.
The Social Security trust fund
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    in the time it takes to identify the situation, enact a policy, and allow it to work, economic circumstances may have changed.
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    includes assets held by these programs to help pay for future projected tax revenue shortfalls.
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    reduction in investment spending caused by the increase in interest rates, arising from an increase in government spending.
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    most of the current revenues from the Social Security tax are paid to current Social Security retirees.
Q.2.
Why is the debt as a percentage of GDP more relevant than the total debt?
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    owed by the federal government to all security holdersa portion of U.S. debt.
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    most of the current revenues from the Social Security tax are paid to current Social Security retirees.
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    Debt as a percentage of GDP measures the economy's ability to manage debt correct.
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    in the time it takes to identify the situation, enact a policy, and allow it to work, economic circumstances may have changed.
Q.3.
As a percentage of GDP, the total U.S. public debt is the highest such debt among the world's advanced nations
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    True
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    False
Q.4.
Expectations of a near-term policy reversal weaken fiscal policy because
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    an increase in government spending.
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    increasing government spending, decreasing taxes, or both.
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    a cut in taxes.
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    consumers may hesitate to increase their spending because they believe that tax rates will rise again.
Q.5.
Built-in, or automatic, stabilizers work by changing
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    tax revenue and government payouts correct so that GDP changes are reduced.
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    owed by the federal government to all security holdersa portion of U.S. debt.
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    politicians are more interested in reelection than in stabilizing the economy.
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    government borrowing to finance the debt increases demand for funds and competes with private borrowing.
Q.6.
For a person who wants to preserve the size of government, the fiscal options for ending a recession include
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    a cut in taxes.
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    increasing government spending, decreasing taxes, or both.
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    an increase in government spending.
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    consumers may hesitate to increase their spending because they believe that tax rates will rise again.
Q.7.
As a percentage of GDP, the total U.S. public debt held by the public was larger in 2010 than it was in 1990.
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    True
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    False
Q.8.
A political business cycle happens because
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    includes assets held by these programs to help pay for future projected tax revenue shortfalls.
  • 0%
    tax revenue and government payouts correct so that GDP changes are reduced.
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    politicians are more interested in reelection than in stabilizing the economy.
  • 0%
    Debt as a percentage of GDP measures the economy's ability to manage debt correct.
Q.9.
Budget deficits in 2002 were due to
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    politicians are more interested in reelection than in stabilizing the economy.
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    the recession and tax cuts
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    fiscal stimulus after the financial collapse
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    tax revenue and government payouts correct so that GDP changes are reduced.
Q.10.
The government's fiscal policy options for moving the economy out of a recession include
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    a cut in taxes.
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    increasing government spending, decreasing taxes, or both.
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    consumers may hesitate to increase their spending because they believe that tax rates will rise again.
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    an increase in government spending.
Q.11.
An internally held public debt is like a debt of the left hand owed to the right hand.
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    True
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    False
Q.12.
Total U.S. debt is the total amount of money debt held by the public is
  • 0%
    tax revenue and government payouts correct so that GDP changes are reduced.
  • 0%
    Debt as a percentage of GDP measures the economy's ability to manage debt correct.
  • 0%
    most of the current revenues from the Social Security tax are paid to current Social Security retirees.
  • 0%
    owed by the federal government to all security holdersa portion of U.S. debt.