Module 13 Test

The Office of Management and Budget (OMB) is part of the a. Senate b. Executive Office of the president

Executive Office of the President.

The federal government's fiscal year runs from a. April 1 through March 31 b. October 1 through September 30

October 1 through September 30.

What was the budget situation of the federal government at the end of the twentieth century? a. There was a budget surplus b. The budget deficit was larger than ever

There was a budget surplus.

Which is a short-term bond that must be paid within a year or less? a. treasury bill b. treasury bond

Treasury bill

When government revenues and expenditures are equal, there is a. balanced budget b. hyperinflation

a balanced budget.

Which of the following might be part of an expansionary policy? a. lower gov't spending b. tax cut

a tax cut

A government program that changes automatically depending on GDP and a person's income is an example of a. automatic stabilizer b. classical economics

an automatic stabilizer.

According to the Laffer curve, a. both a high and low tax rate can produce the same revenues b. a low tax rate will produce a higher revenue

both a high and low tax rate can produce the same revenues.

A supply-side economist would be in favor of a. raising taxes b. cutting taxes

cutting taxes.

The main idea of the multiplier effect is that a. as the economy grows, more jobs are created b. every dollar the government spends creates a greater than one dollar change in economic output

every dollar the government spends creates a greater than one dollar change in economic output.

What type of fiscal policies did President Franklin D. Roosevelt carry out after his election in 1932? a. expansionary b. contractionary

expansionary

The federal budget process begins with a. the Congressional Budget Office b. federal agency estimates

federal agency estimates.

Classical economics states that a. gov't should cut taxes in a recession b. markets should be allowed to regulate themselves

markets should be allowed to regulate themselves.

If the President vetoes the budget, Congress a. need a simple majority to override the President's veto b. needs a 2/3 majority to override the President's veto

needs a 2/3 majority to override the President's veto.

A budget surplus occurs when a. expenditures exceed revenues b. revenues exceed expenditures

revenues exceed expenditures.

John Maynard Keynes believed that to end the Great Depression, government should a. lower taxes b. spend and buy more goods and services

spend and buy more goods and services.

Which act created a "pay-as-you-go" system that requires Congress to raise enough revenue to cover increases in direct spending? a. 1990 Budget Enforcement Act b. Gramm Rudman Hollings Act

the 1990 Budget Enforcement Act

The loss of funds for private investment due to government borrowing is known as a. crowding out effect b. multiplier effect

the crowding-out effect.

The national debt is a. all the money individuals owe on their credit cards b. the total amount of money the federal gov't owes to bondholders

the total amount of money the federal government owes to bondholders.

What is the main goal of a government's fiscal policy? a. to produce balanced budget b. maintain a stable economy

to maintain a stable economy