Macro chapter 17 Quiz

In 2009, the U.S. government spent $1.4 trillion more than it collected in taxes. This deficit was about:

10% of the size of the GDP in 2009.

A government annually collects $230 billion in tax revenue and allocates $29 billion to military spending. What percentage of this government's budget is spent on its military?

12.60%

A government collects $70 billion quarterly in tax revenue. Each year it allocates $15 billion to the justice system and $29 billlion for the administrative costs. What percentage of its total annual tax revenue is left for allocation to the remaining categories of government spending?

84.29%

What do goods like gasoline, tobacco, and alcochol typically share in common?

They are all subject to government excise taxes.

If an economy moves into a recession, causing that country to produce less than potential GDP, then:

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

A ____________________ means that government spending and taxes are equal.

balanced budget

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:

budget surplus.

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 ____________________________.

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.

in accumulated government debbt

If a country's GDP increases, but its debt decreases during that year, then the country's debt to GDP ratio for the year will _____________ in proportion to the magnitude of the changes.

increase or decrease