Macroeconomics Chapter 30

budget deficit

A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

proportional tax

A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

12.60%

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

28.57%

A government collects $700 billion annually in tax revenue. Each year it allocates $70 billion to the justice system and $130 billion for its own administrative costs. What percentage of annual tax revenue is allocated to these two categories of government spending?

$540 billion

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?

in accumulated government debt

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid.

is lower than its historical high point.

Currently, the US government accumulated debt to GDP ratio:

increase

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.

increase or decrease

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.

an expansionary fiscal policy; an increase in government spending

The government can use _____________ in the form of ____________________ to increase the level of aggregate demand in the economy.

shorter than

The time lag for monetary policy is typically ________________ the time lag for fiscal policy.

expansionary

If a government reduces taxes in order to increase the level of aggregate demand, what type of fiscal policy is being used?

proportional.

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:

progressive.

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:

income tax is a progressive tax

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?

the standardized employment budget

If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget.

a budget deficit.

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:

corporate profits

In 2010, Microsoft will pay corporate income tax to the federal government based on the company's __________________.

is higher than it has ever been.

The current level of US government accumulated debt, when measured in nominal dollars:

They are all subject to government excise taxes.

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

unemployment and inflation increase.

When increasing oil prices cause aggregate supply to shift to the left, then:

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

When inflation begins to climb to unacceptable levels in the economy, the government should:

discretionary fiscal policy.

When the government passes a new law that explicitly changes overall tax or spending levels, it is enacting:

regressive

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 ____________________.

Automatic stabilizers

_____________________ are a form of tax and spending rules that can affect aggregate demand in the economy without any additional change in legislation.