Chapter 15

The Office of Management and Budget (OMB) is part of the

Executive Office of the President.

The federal government's fiscal year runs from

October 1 through September 30.

What was the budget situation of the federal government at the end of the twentieth century?

There was a budget surplus.

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

Treasury bill

When government revenues and expenditures are equal, there is

a balanced budget.

Which of the following might be part of an expansionary policy?

a tax cut

A government program that changes automatically depending on GDP and a person's income is an example of

an automatic stabilizer.

According to the Laffer curve,

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

A supply-side economist would be in favor of

cutting taxes.

The main idea of the multiplier effect is that

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?

expansionary

The federal budget process begins with

federal agency estimates.

Classical economics states that

markets should be allowed to regulate themselves.

If the President vetoes the budget, Congress

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

A budget surplus occurs when

revenues exceed expenditures.

John Maynard Keynes believed that to end the Great Depression, government should

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?

the 1990 Budget Enforcement Act

The loss of funds for private investment due to government borrowing is known as

the crowding-out effect.

The national debt is

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

What is the main goal of a government's fiscal policy?

to maintain a stable economy