978-1259723223 Test Bank TBChap033 Part 6

subject Type Homework Help
subject Pages 14
subject Words 4759
subject Authors Campbell McConnell, Sean Flynn, Stanley Brue

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33-101
161.
The largest proportion of the U.S. public debt is held by
162.
In 2015, about percent of the U.S. public debt was held by people and institutions abroad.
163.
In 2015, about percent of the U.S. public debt was held by the U.S. government and Federal
Reserve.
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164.
To say that "the U.S. public debt is mostly held internally" is to say that
165.
Payment of interest on the U.S. public debt
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33-103
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
Topic:
The U.S. Public Debt
166.
The most likely way the public debt burdens future generations, if at all, is by
167.
Other things equal, the stock of capital inherited by future generations is likely to be smaller
when government spending
168.
The crowding-out effect suggests that
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33-104
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
Diffic ult y: 02 Medium
Learning Objective: 33-06 Discuss the size, composition, and consequences of the U.S.
public debt.
Test Bank: I
Topic:
The U.S. Public Debt
169.
The federal government has a large public debt that it finances through borrowing. As a
result, real interest rates are higher than otherwise and the volume of private
investment
spending is lower. This illustrates the
170.
The real burden of an increase in the public debt
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171.
Which one of the following might offset a crowding-out effect of financing a large public
debt?
172.
Refer to the diagram. Assume that the investment demand curve is ID1. The crowding-out effect
of a large public debt would be shown as a(n)
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
of $5 billion.
D. increase in the interest rate from 6 percent to 8 percent and a decline in investment spending
of $40 billion.
173.
Refer to the diagram. Assume that the investment demand curve is ID1. Which of the following
effects of financing a large public debt might shift the investment
demand curve from ID1 to
ID2, wholly offsetting any crowding-out effect?
page-pf7
33-107
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Diffic ult y: 02 Medium
Learning Objective: 33-06 Discuss the size, composition, and consequences of the U.S.
public debt.
Test Bank: I
Topic: The U.S. Public Debt
Type: Graph
174.
Which of the following is the best example of public investment?
175.
Which of the following is not considered a legitimate concern of a large public debt?
176.
Which of the following is considered a legitimate concern of a large public debt?
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33-108
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C.
burdening future generations
D.
collapse of the financial system
177.
(Last Word) The combined cost of Social Security and Medicare programs was what
percentage of U.S. GDP in 2014?
178.
(Last Word) In 1960 the ratio of workers to Social Security and Medicare beneficiaries was
; by 2040 it is projected to be .
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33-109
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic:
Problems, Criticisms, and Complications of Implementing Fiscal Policy
179.
(Last Word) Which of the following would not help to relieve the Social Security and
Medicare shortfalls?
True / False Questions
180.
Expansionary fiscal policy is so named because it involves an expansion of the nation's
money supply.
181.
If the MPC in the economy is 0.75, government could shift the aggregate demand curve
rightward by $30 billion by cutting taxes by $10 billion.
page-pfa
33-110
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 33-01 Identify and explain the purposes, tools, and limitations of
fiscal policy.
Test Bank: I
Topic:
Fiscal Policy and the AD-AS Model
182.
A contractionary fiscal policy shifts the aggregate demand curve leftward.
183.
Demand-pull inflation can be restrained by increasing government spending and reducing
taxes.
184.
Built-in stability is synonymous with discretionary fiscal policy.
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185.
The actual budget may be in deficit while the cyclically adjusted budget is in surplus.
186.
An increase in the cyclical deficits will automatically increase the cyclically adjusted
budget deficit.
187.
Tax revenues automatically increase during economic expansions and decrease during
recessions.
188.
The operational lag of fiscal policy refers to the time that elapses between the beginning of a
recession or inflation and the certain awareness that it is actually
happening.
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189.
The crowding-out effect refers to the possibility that deficit spending may motivate people to
increase their saving in anticipation of higher future taxes.
190.
Fiscal policy is mainly undertaken by the Federal Reserve.
191.
Tax increases and government spending cuts by state governments during recessions often
reduce the expansionary impact of fiscal policy by the federal government.
page-pfd
33-113
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
Diffic ult y: 02 Medium
Learning Objective: 33-05 Discuss the problems that governments may encounter in
enacting and applying fiscal policy.
Test Bank: I
Topic: Problems, Criticisms, and Complications of Implementing Fiscal Policy
192.
Permanent tax reductions are more likely to be expansionary than temporary tax reductions.
193.
As measured by the cyclically adjusted budget, the U.S. government engaged in a
contractionary fiscal policy in 2005 and 2006.
194.
Financing wartime expenditures by increasing internally held public debt permits a nation to
defer a part of the economic cost of war.
page-pfe
33-114
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Diffic ult y: 02 Medium
Learning Objective: 33-06 Discuss the size, composition, and consequences of the U.S.
public debt.
Test Bank: I
Topic: The U.S. Public Debt
195.
It is more meaningful economically to measure the public debt relative to the GDP than to
measure it in absolute terms.
196.
The United States has experienced both budget surpluses and deficits since 2000.
197.
The public debt is the accumulation of all deficits and surpluses that have occurred through
time.
page-pff
33-115
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
Topic:
The U.S. Public Debt
198.
The public debt is held as Treasury bills, Treasury notes, Treasury bonds, and U.S. savings
bonds.
199.
The crowding-out effect of the public debt may be dampened if the investment-demand
curve is shifting to the right.
200.
When the Federal government uses taxation and spending actions to stimulate the economy,
it is conducting
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33-116
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Difficulty: 01 Easy
Learning Objective: 33-01 Identify and explain the purposes, tools, and limitations of
fiscal policy.
Test Bank: II
Topic: Fiscal Policy and the AD-AS Model
201.
When the Federal government takes budgetary action to stimulate the economy or rein in
inflation, such policy is
202.
When changes in taxes and government spending occur in the economy without explicit
action by Congress, such policy is called fiscal policy.
203.
When the Federal government cuts taxes and increases spending to stimulate the economy
during a period of recession, such actions are design to be
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written consent of McGraw-Hill Education.
B.
automatic.
C. countercyclical.
D. nondiscretionary.
204.
Fiscal policy is enacted through changes in
205.
Discretionary fiscal policy is often initiated on the advice of the
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206.
If Congress passes legislation to increase government spending to counter the effects of a
recession, then this would be an example of a(n)
207.
If the U.S. Congress passes legislation to raise taxes to control demand-pull inflation, then
this would be an example of a(n)
208.
The set of fiscal policies that would be most contractionary would be a(n)
page-pf13
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 33-01 Identify and explain the purposes, tools, and limitations of
fiscal policy.
Test Bank: II
Topic:
Fiscal Policy and the AD-AS Model
209.
The intent of contractionary fiscal policy is to
210.
The goal of expansionary fiscal policy is to increase
211.
If the government wishes to increase the level of real GDP, it might reduce
page-pf14
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written consent of McGraw-Hill Education.
D.
its purchases of goods and services.
212.
Refer to the accompanying graph. What combination would most likely cause a shift from AD1 to
AD2?

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