murgo final part3

67. In what year did the United States have a federal budget surplus? A) 2000 B) 2004 C) 2006 D) 2010

A) 2000

59. Which of the following illustrates the information lag? A) The economy is predicted to increase at 0.1% in July, but the numbers are revised in August to reflect an actual 2% decrease. B) Current data have been provided to policymakers, but they decide to wait and see what happens in the next quarter. C) The government responds to the 2% decrease in the economy, and private investment is crowded out of the investment market. D) The government decides not to respond to the 2% decrease in the economy because it is worried about the possibility of inflation.

A) The economy is predicted to increase at 0.1% in July, but the numbers are revised in August to reflect an actual 2% decrease.

75. If interest rates fall, the burden of a nation's public debt will _____ and it will be _____ difficult to service its debt. A) fall; less B) fall; more C) rise; less D) rise; more

A) fall; less

61. Which are examples of automatic stabilizers? A) income tax revenues and transfer payments B) sales tax rates and transfer payments C) sales tax revenues and income security D) sales tax rates and income security

A) income tax revenues and transfer payments

58. The _____ lag is the time policymakers must wait for economic data to be collected, processed, and reported. A) information B) recognition C) implementation D) decision

A) information

73. Public debt owned by U.S. banks, corporations, mutual funds, pension plans, and individuals is called ________ debt. A) internally held B) personal C) proper D) national

A) internally held

66. Under a cyclically balanced budget, a government should _____ when the economy is growing and _____ when GDP is declining. A) raise taxes; raise spending B) raise taxes; reduce spending C) reduce taxes; raise spending D) reduce taxes; reduce spending

A) raise taxes; raise spending

53. Figure: Laffer Curve (Figure: Laffer Curve) The graph shows a hypothetical Laffer curve. If the tax rate is 80%: A) the government should reduce the rate to about 50% to maximize tax revenue. B) the tax rate should be increased to 100% (all income taken in taxes) to maximize tax collection. C) the tax rate is at its optimal level. D) the tax rate should be reduced to zero to maximize tax revenue.

A) the government should reduce the rate to about 50% to maximize tax revenue.

70. The U.S. public debt fell during the _____ and rose during the _____. A) 1940s; 1950s B) 1950s; 2010s C) 2010s; 1960s D) 1950s; 1960s

B) 1950s; 2010s

52. __________ marginal tax rates and _______________ are commonly used to increase aggregate supply. A) Lowering; increasing government transfer payments B) Lowering; offering investment tax credits C) Raising; increasing government transfer payments D) Raising; reducing government spending

B) Lowering; offering investment tax credits

63. As GDP decreases, tax revenues _____, causing a _______ to aggregate demand. A) decline; restraint B) decline; stimulus C) increase; restraint D) increase; stimulus

B) decline; stimulus

68. The _____ is the sum of past _____. A) public debt; national debts B) public debt; budget deficits C) budget deficit; public debts D) budget deficit; national debts

B) public debt; budget deficits

69. During which decade did the U.S. public debt exceed its GDP? A) the 1930s B) the 1940s C) the 1970s D) the 2010s

B) the 1940s

72. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion.

C) $175 billion.

64. Which economist promoted public choice theory? A) Robert Solow B) Adam Smith C) James Buchanan D) Arthur Laffer

C) James Buchanan

60. Legislators debate for six months on which spending programs to utilize to manipulate the business cycle. This is an example of the: A) recognition lag. B) information lag. C) decision lag. D) implementation lag.

C) decision lag.

55. When a firm can _____ its capital equipment over a shorter period, it cuts its taxes _____. A) appreciate; later B) appreciate; now C) depreciate; now D) depreciate; later

C) depreciate; now

62. As GDP increases, tax revenues _____, which in turn ______ GDP growth. A) decline; restrains B) decline; expands C) increase; restrains D) increase; expands

C) increase; restrains

56. Which of the following policies do supply-side economists believe is the best for increasing the standard of living? A) redistributing income from the wealthy to the poor B) raising taxes to support government public works projects C) increasing investment in capital that boosts worker productivity D) increasing the supply of labor

C) increasing investment in capital that boosts worker productivity

57. An automatic stabilizer: A) injects money into the economy during booms. B) extracts money from the economy during recessions. C) is exemplified by a program such as unemployment compensation. D) is exemplified by a program such as the Corps of Engineers dam-building program

C) is exemplified by a program such as unemployment compensation.

51. The Laffer curve has which variables on its axes? A) price and quantity B) CPI and GDP C) tax rates and tax revenue D) aggregate expenditure and income

C) tax rates and tax revenue

71. Suppose the Treasury sells $10 billion worth of securities to the Social Security Administration and $15 billion to the general public. This sale added ________ billion to gross public debt and ________ billion to the debt held by the public. A) $15; $15 B) $10; $15 C) $15; $25 D) $25; $15

D) $25; $15

54. Figure: Laffer Curve 3 (Figure: Laffer Curve 3) A supply-side economist is advocating reducing income tax rates. She is probably assuming that the economy is at point ______ in the graph. A) a B) b C) c D) d

D) d

65. Which two important leakages helped reduce the real life spending multiplier during the stimulus that was implemented during 2009? A) exports and saving B) imports and saving C) exports and taxes D) imports and taxes

D) imports and taxes

74. If interest rates rise, the burden of a nation's public debt will _____ and it will be _____ difficult to service its debt. A) fall; less B) fall; more C) rise; less D) rise; more

D) rise; more