M45.1: Budget Deficits and the National Debt

The overall effect of the U.S. national debt depends on:

- your political point of view - what you're looking at

Click here for information regarding the country of Genovia (whose currency is the Geno). Based on the information provided, Genovia has a national debt of:

10 million genos

___________ is the the amount of money the government needs to borrow in one year.

A budget deficit

Budget deficits and a country's national debt are two names for the same thing.

False

It's helpful to think of the U.S. national debt like a family owing money to a credit card company.

False

According to the video, which of these is a larger and more "realistic" concern?

Lenders charging the U.S. government higher interest rates.

(Check ALL that apply) Which of the following is true?

The debt ceiling does nothing to cut government spending or raise tax revenue.

Money the federal government owes to itself which is borrowed from programs such as Social Security, Medicare, and federal employee pensions is known as:

intragovernmental debt

The government has a budget deficit if:

its total tax revenues are less than its total expenditures.

When a government runs a budget deficit, it MUST:

borrow money to cover that year's shortfall

___________ is the total amount of money that the government owes from all of the years of borrowing combined.

The national debt

The national debt __________ in years in which the federal government incurs a ___________.

rises; deficit

The largest single holder of U.S. government debt is: (Forgot? Loop back to 07:45)

the United States government

A cap on how much debt the U.S. Treasury can issue is known as:

the debt ceiling

Both domestic and foreign lenders are extremely confident in the U.S. government's ability to repay its debts. This is illustrated by:

the low interest rates charged to the U.S. government.

The accumulation of past budget deficits is known as:

the total national debt

During recessions, it is to be expected that the U.S. government:

will run a budget deficit

The highest amount that the national debt can reach as authorized by Congress is called the:

debt limit or debt ceiling

Loop back to 00:30 before answering this question. Click here to refer to a table for Cliffordonia. Assume that Year 1 is the first year for this economy and Year 5 is the current year. What is the total public or national debt of Cliffordonia?

none of these (You should have calculated $125)

It is more useful to examine the U.S. national debt:

as a percentage of gross domestic product

A government would be better able to pay off its debt if:

GDP grows faster than the government's debt.

Loop back to 00:30 before answering this question. Click here to refer to a table for Cliffordonia. In which year was there a budget surplus?

Year 1

"Click here" for information regarding the country of Genovia (whose currency is the Geno). Based on the information provided, in which year(s) did Genovia have a budget deficit?

Year 3 Year 1

When a government spends more than it brings in in tax revenue in a given year is known as:

a budget deficit

The federal budget tends to move toward ________ as the economy _______.

a deficit; contracts