Econ Chpt 15 Fiscal Policy
5. The Office of Management and Budget (OMB) is part of the
CORRECT: Executive Office of the President.
15. The federal government's fiscal year runs from
CORRECT: October 1 through September 30.
8. What was the budget situation of the federal government at the end of the twentieth century?
CORRECT: There was a budget surplus.
19. Which is a short-term bond that must be paid within a year or less?
CORRECT: Treasury bill
20. When government revenues and expenditures are equal, there is
CORRECT: a balanced budget.
3. Which of the following might be part of an expansionary policy?
CORRECT: a tax cut
17. A government program that changes automatically depending on GDP and a person's income is an example of
CORRECT: an automatic stabilizer.
4. According to the Laffer curve,
CORRECT: both a high and low tax rate can produce the same revenues.
12. A supply-side economist would be in favor of
CORRECT: cutting taxes.
16. The main idea of the multiplier effect is that
CORRECT: every dollar the government spends creates a greater than one dollar change in economic output.
9. What type of fiscal policies did President Franklin D. Roosevelt carry out after his election in 1932?
CORRECT: expansionary
10. The federal budget process begins with
CORRECT: federal agency estimates.
18. Classical economics states that
CORRECT: markets should be allowed to regulate themselves.
2. If the President vetoes the budget, Congress
CORRECT: needs a 2\/3 majority to override the President's veto.
6. A budget surplus occurs when
CORRECT: revenues exceed expenditures.
11. John Maynard Keynes believed that to end the Great Depression, government should
CORRECT: spend and buy more goods and services.
1. Which act created a "pay-as-you-go" system that requires Congress to raise enough revenue to cover increases in direct spending?
CORRECT: the 1990 Budget Enforcement Act
7. The loss of funds for private investment due to government borrowing is known as
CORRECT: the crowding-out effect.
14. The national debt is
CORRECT: the total amount of money the federal government owes to bondholders.
13. What is the main goal of a government's fiscal policy?
CORRECT: to maintain a stable economy