A) The price level increases by 500 percent and nominal debt increases by 500 percent.
B) The price level increases by 200 percent and nominal debt increases by 600 percent.
C) The price level decreases by 50 percent and nominal debt increases by 300 percent.
D) The price level increases by 400 percent and nominal debt increases by 200 percent.
E) The price level decreases by 90 percent and nominal debt increases by 200 percent.
G) A) and B)
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B) False
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B) False
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A) The income tax
B) The property tax
C) Social Security benefits paid to a retired government worker
D) Food stamps
E) The salary of a federal judge
G) C) and D)
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A) are problems if they grow faster than GDP
B) are unrelated in the short run
C) are unrelated in the long run,but not in the short run
D) generally grow faster than government spending
E) contributed to the crisis experienced by the U.S.economy in the late 1990s
G) A) and D)
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A) first;first.
B) first;second.
C) second;first.
D) second;second.
E) None of the above.
G) B) and E)
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A) any fiscal policy that cycles between budget surpluses and budget deficits
B) the use of taxes and government spending to keep the economy close to potential GDP in the short run
C) any fiscal policy that is employed during a business cycle
D) the use of open market purchases of bonds to keep the economy close to potential GDP in the short run
E) the use of changes in tax rates to keep the economy at potential output in the long run
G) B) and C)
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A) there are technological issues that need to be solved.
B) they are too complex to implement.
C) most such projects are "prestige" projects,with little tangible value.
D) most such projects do not increase productivity long into the future.
E) most such projects are not "shovel ready" when the stimulus is needed.
G) A) and B)
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A) 2.0 smaller than the spending multiplier
B) 1.0 smaller than the spending multiplier and negative in sign
C) positive
D) positive and larger than the spending multiplier
E) negative and larger than the spending multiplier
G) A) and D)
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A) If the national debt grows at the same rate as nominal GDP
B) If the nominal interest on the national debt grows faster than nominal GDP
C) If the total interest payments on the national debt grow faster than nominal GDP
D) If the national debt grows faster than nominal GDP
E) If the real interest on the national debt grows faster than real GDP
G) A) and C)
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A) will be zero when the federal budget is balanced.
B) has been shrinking in the last 30 years.
C) is equal to the government's budget deficit.
D) can grow without negative economic effects.
E) is a flow measure while the deficit is a stock measure.
G) A) and E)
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A) -$250 billion
B) $150 billion
C) $250 billion
D) -$100 billion
E) -$150 billion
G) A) and D)
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B) False
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A) only be employed in reaction to an existing recession
B) only be employed in reaction to an existing boom
C) be employed to prevent a potential recession or boom or in reaction to an existing recession or boom
D) only be employed to prevent a potential boom
E) only be employed to prevent a potential recession
G) C) and D)
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A) An increase in the national debt and a budget surplus
B) A decrease in the national debt and a balanced budget
C) An unchanged national debt and a budget deficit
D) Positive national debt and a budget surplus
E) A decreasing national debt and a budget deficit
G) C) and D)
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A) the needs of the poor receive more publicity
B) taxes rise
C) GDP rises and inflation soars
D) the retirement age remains unchanged over time
E) recessions occur
G) C) and D)
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A) When it rises at a slower pace than GDP.
B) When the government runs deficits over a long period of time,such as a decade.
C) When it rises at a faster pace than GDP.
D) When the government does not run enough surpluses to counteract prior deficits.
E) When it rises at a slower pace than the money supply.
G) A) and C)
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A) the interest rate
B) the federal funds rate
C) government spending
D) the regulatory code
E) Presidential executive orders
G) B) and D)
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A) as long as private firms are taking on more debt
B) as long as the debt involves no interest payments
C) if GDP is growing faster than the debt is growing
D) if the interest rate is below 3 percent
E) as long as the debt is growing by less than 3 percent per year
G) A) and B)
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A) MPC/(1 - MPC)
B) MPC/(1 + MPC)
C) -MPC/(MPC - 1)
D) -MPC/(1 - MPC)
E) MPC + (1 - MPC)
G) A) and E)
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