Quiz Wk 10

At the beginning of 2009, a government had a total debt of $540 billion dollars. It ended 2009 with a $6 billion dollar budget surplus. In 2010, its budget surplus reached $8 billion dollars. What is the total debt of the government equal to at the end of 2010? Select one: a. $554 billion b. $0 c. $14 billion d. $540 billion

$540 billion

Which of the following is the percentage of annual US government spending allocated to foreign aid? Select one: a. 10% b. 1% c. 17% d. 21%

1%

In 2009, the U.S. government spent $1.4 trillion more than it collected in taxes. This deficit was about: Select one: a. 26% of the size of the U.S. GDP in 2009. b. 10% of the size of the U.S. GDP in 2009. c. 22% of the size of the U.S. GDP in 2009. d. 18 % of the size of the U.S. GDP in 2009.

10% of the size of the U.S. GDP in 2009.

_____________________ are a form of tax and spending rules that can affect aggregate demand in the economy without any additional change in legislation. Select one: a. Automatic stabilizers b. Standardized employment budgets c. Budget expenditures d. Discretionary fiscal policies

Automatic stabilizers

What do goods like gasoline, tobacco, and alcohol typically share in common? Select one: a. A progressive tax is imposed on each of them. b. They are all subject to government fiscal taxes. c. They are all subject to government excise taxes. d. A regressive tax is imposed on each of them.

They are all subject to government excise taxes.

The government can use _____________ in the form of ____________________ to increase the level of aggregate demand in the economy. Select one: a. an expansionary fiscal policy; an increase in government spending b. a contractionary fiscal policy; a reduction in taxes c. a contractionary fiscal policy; an increase in taxes d. an expansionary fiscal policy; an increase in corporate taxes

an expansionary fiscal policy; an increase in government spending

If Canada's economy moves into an expansion while its economy is producing more than potential GDP, then: Select one: a. automatic stabilizers will increase government spending and decrease tax revenue. b. automatic stabilizers will decrease government spending and increase tax revenue. c. government spending and tax revenue will decrease because of automatic stabilizers. d. government spending and tax revenue will increase because of automatic stabilizers.

automatic stabilizers will decrease government spending and increase tax revenue.

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year. Select one: a. budget surplus b. regressive tax c. corporate tax d. budget deficit

budget deficit

If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a: Select one: a. budget deficit. b. budget surplus. c. decrease in proportional taxes. d. decrease in payroll tax.

budget surplus.

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes. Select one: a. standardized b. discretionary c. contractionary d. expansionary

contractionary

When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting: Select one: a. progressive fiscal policy. b. discretionary fiscal policy. c. regressive fiscal policy. d. fiscal policy.

discretionary fiscal policy.

If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used? Select one: a. discretionary b. standardized c. expansionary d. contractionary

expansionary

Assume that laws have been passed that require the federal government to run a balanced budget. During a recession, the government will want to implement _____________________, but may be unable to do so because such a policy would ____________________________. Select one: a. contractionary fiscal policy; lead to a budget surplus b. expansionary fiscal policy; lead to a budget deficit c. discretionary fiscal policy; lead to a budget surplus d. contractionary fiscal policy; lead to a budget deficit

expansionary fiscal policy; lead to a budget deficit

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid. Select one: a. from decreases in corporate tax b. from decreases in income tax c. in accumulated government debt d. from decreases in excise tax

in accumulated government debt

If individual income tax accounts for more total revenue than the payroll tax in the U.S., why would over half the households in the country pay more in payroll taxes than in income taxes? Select one: a. income tax is a proportional tax b. payroll tax is a regressive tax c. payroll tax is a progressive tax d. income tax is a progressive tax

income tax is a progressive tax

If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes. Select one: a. increase or decrease b. decrease because GDP decreased c. decrease d. increase

increase

The current level of US government accumulated debt, when measured in nominal dollars: Select one: a. is higher than it has ever been. b. is lower than it has ever been. c. has reached higher levels in the past. d. has remained steady for the past decade.

is higher than it has ever been.

Currently, the US government accumulated debt to GDP ratio: Select one: a. has remained relatively steady for the past decade. b. is lower than its historical high point. c. is higher than it has ever been. d. is lower than it has ever been.

is lower than its historical high point.

If government tax policy requires Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is: Select one: a. regressive. b. progressive. c. proportional. d. optional.

progressive

A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes. Select one: a. regressive tax b. excise tax c. proportional tax d. progressive tax

progressive tax

If government tax policy requires Bill to pay $20,000 in taxes on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is: Select one: a. regressive. b. progressive. c. optional. d. proportional.

proportional

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income. Select one: a. proportional tax b. progressive tax c. estate and gift tax d. regressive tax

proportional tax

If South Dakota's governor reports a budget surplus in 2011, that state government likely: Select one: a. increased the proportional tax level. b. received more in taxes than it spent in that year. c. increased the corporate income tax rate. d. equalized spending and taxes in that year

received more in taxes than it spent in that year.

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is ____________________. Select one: a. progressive b. regressive c. proportional d. optional

regressive

The time lag for monetary policy is typically ________________ the time lag for fiscal policy. Select one: a. about the same as b. longer than c. the same as d. shorter than

shorter than

When a country's economy is producing at a level that exceeds its potential GDP, the standardized employment budget will show a __________________ than the actual budget. Select one: a. surplus b. larger deficit c. smaller surplus d. smaller deficit

smaller deficit

If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget. Select one: a. discretionary fiscal policy b. the standardized employment budget c. the automatic stabilizers d. expansionary fiscal policy

the standardized employment budget

When increasing oil prices cause aggregate supply to shift to the left, then: Select one: a. unemployment decreases and inflation increases. b. unemployment increases and inflation decreases. c. unemployment and inflation decrease. d. unemployment and inflation increase.

unemployment and inflation increase.

When inflation begins to climb to unacceptable levels in the economy, the government should: Select one: a. use expansionary fiscal policy to shift aggregate demand to the left. b. use contractionary fiscal policy to shift aggregate demand to the left. c. use expansionary fiscal policy to shift aggregate demand to the right. d. use contractionary fiscal policy to shift aggregate demand to the right.

use contractionary fiscal policy to shift aggregate demand to the right.

At the beginning 2010, the government of Norway had no debt and held $180 billion dollars in its sovereign fund. To stimulate its economy during 2011, Norway's government plans to spend $35 billion more than it will collect in tax revenue and in 2012, its spending will exceed tax revenues by $25 billion. What will the total government debt equal at the end of 2012? Select one: a. $0 b. $120 billion c. $60 billion d. $180 billion

$0

Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing? Select one: a. fiscal policies b. financial policies c. monetary policies d. economic policies

Fiscal policies

If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be: Select one: a. a budget deficit. b. an increase in excise tax. c. a budget surplus. d. an increase in payroll tax.

a budget deficit.

During a recession if a government uses an expansionary fiscal policy to increase GDP the, Select one: a. aggregate supply will shift to the right b. aggregate supply will shift to the left c. aggregate demand will shift to the right d. aggregate demand will shift to the left

aggregate demand will shift to the right

The federal government levies _____________________________ on people who pass assets ____________________________, either after death or during life. Select one: a. an excise tax; to their children b. a progressive tax; to non-family members c. an estate and gift tax; to the next generation d. a regressive tax; to non-family members

an estate and gift tax; to the next generation

If an economy moves into a recession, causing that country to produce less than potential GDP, then: Select one: a. tax revenue and government spending will be higher because of automatic stabilizers. b. automatic stabilizers will cause tax revenue to decrease and government spending to increase. c. automatic stabilizers will cause tax revenue to increase and government spending to decrease. d. tax revenue and government spending will be lower because of automatic stabilizers.

automatic stabilizers will cause tax revenue to decrease and government spending to increase.

A ______________________ means that government spending and taxes are equal. Select one: a. fiscal budget b. discretionary fiscal policy c. contractionary fiscal policy d. balanced budget

balanced budget

In 2010, Microsoft will pay corporate income tax to the federal government based on the company's __________________. Select one: a. corporate profits b. optional tax rate c. excise profits d. proportional tax rate

corporate profits

If a country's GDP increases, but its debt also increases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes. Select one: a. increase b. increase or decrease c. decrease because GDP increased d. increase because its debt increased

increase or decrease