ECON 2030 Chapter : NOtes Chapter 34
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You hear on the nightly news that the president has vowed to decrease the nation's debt. Both the government and private citizens will have to buckle down and learn to do without, he says.
In order to reduce its debt, a nation must:
A. | run lower deficits. |
B. | decrease tax rates. |
C. | run lower surpluses. |
D. | increase in government spending. |
Debt reduction will result in:
A. | more public works projects, higher transfer payments, and more money available for households to spend. |
B. | fewer public works projects, higher transfer payments, and more money available for households to spend. |
C. | more public works projects, lower transfer payments, and less money available for households to spend. |
D. | fewer public works projects, lower transfer payments, and less money available for households to spend. |
A friend of yours looks at the state of the U.S. debt in 2011 and tells you, Since the debt is so high, we must be running an incredibly large deficit every year. Your friend's analysis is:
A. | not valid, because the debt is always changing even when deficits are the same. |
B. | not valid, because the debt can be high even when the deficit for an individual year is small. |
C. | valid, because the debt is always changing even when deficits are the same. |
D. | valid, because the public debt is the sum of all deficits and surpluses run by the government over time and can be high even when the deficit for an individual year is small. |
Assume that the government in some nations intended to respond to low employment via fiscal policy.
a. What type of policy would this require?
A. | A contractionary fiscal policy designed to decrease the aggregate demand curve. |
B. | An expansionary fiscal policy designed to decrease the aggregate demand curve. |
C. | An expansionary fiscal policy designed to increase the aggregate demand curve. |
D. | A contractionary fiscal policy designed to increase the aggregate demand curve. |
b. Assume that this policy ended up having an undesirable outcome. How could this happen in terms of formulation and implementation lags?
A. | This could happen if the implementation lag exceeded the formulation lag. |
B. | This could happen if the formulation lag exceeded the implementation lag. |
C. | This could happen if the formulation lag and the implementation lag exceeded the expansion. |
D. | This could happen if the formulation lag and the implementation lag exceeded the recession. |
Econo Nation started 2008 with no national budget debt or surplus. By the end of 2008, it had a budget surplus of $286 million; in 2009, it had a budget deficit of $-425 million; in 2010, it had a budget surplus of $100 million, and the amount of its budget deficit or surplus in 2011 is unknown. If at the end of 2011 Econo Nation's national debt totalled $52 million, determine the deficit or surplus in 2011.
Instructions: Enter your answer as a whole number and include a negative sign if there is a deficit.
Period | Deficit (-) or surplus (+) |
Beginning of 2008 | $0 |
End of 2008 | $286 million |
2009 | $-425 million |
2010 | $100 million |
End of 2011 | _______ million |
How much less of one output can be produced if more of another output is produced. What combination of outputs is best. How much output can be produced from a given level of inputs. |
debt owed by one government to another government. government debt owed to citizens. government debt owed to foreigners. |
never be run since they crowd out investment in the short run. be run on a temporary basis whenever the economy is below potential output. be run on a permanent basis since they can always be financed over and over again. |
passive deficits would not exist. structural deficits would increase. structural deficits would not exist. |
surplus in that year must be $10 billion. deficit in that year decreased by $10 billion. surplus in that year increased by $10 billion. |
Reducing the age at which one is eligible to receive payments. Reducing Social Security retirement benefits. Introducing means testing. |
affected by social but not political forces. affected by political but not social forces. affected by both political and social forces. |
affect the price mechanism, but not the legal system. affect the price mechanism through scarcity. do not affect the price mechanism. |
False |
Government ownership of the means of production. Distribution according to need. Tradition determines the what, how, and for whom decisions. |
if its opportunity cost of producing corn is the same as the opportunity cost in other countries. if its opportunity cost of producing corn is lower than the opportunity cost in other countries. regardless of the opportunity cost in other countries. |
tuition paid for the year. value of the next-best activity forgone by attending college. total money outlays associated with attending college. |
the economy is beneath potential income. inflation is not fully anticipated. inflation is fully anticipated. |
The Group of Eight. EU. WTO. |
do not need to be enforced in market economies. must be established before a socialist economy can function properly. ensure an equitable distribution of income in market economies. |
False |
does not change, but debt increases. increases. does not change and neither does the debt. |
the benefit of the activity you would have chosen if you had not taken the course. the benefit you get from taking this course. the cost of the activity you would have chosen if you had not taken the course. |
avoidance of double taxation. ease of formation. greater ability to obtain funds. |
the art of economics. normative economics. it is just as easy in all of the above |