Macroeconomics

Question 6.6. Why do deficits persist even during the expansionary phase of the business cycle? (Points : 1)

       Keynesian fiscal policy        political difficulties in cutting government spending        high taxes        steadily growing defense spending        the trade deficit increases the budget deficit

Question 7.7. In the Keynesian model, employment (Points : 1)

       is determined by output.        is determined by price level.        determines the level of output.        depends on aggregate supply.        is independent of output.

Question 8.8. The national debt is a burden on future generations if (Points : 1)

       it is larger than the one for which the current generation is responsible.        it was incurred to put idle resources to work.        borrowing reduced productive investment and future economic growth.        debt holders are wealthier than the average taxpayer.        the future generation is smaller than the present generation.

Question 9.9. A structural deficit (Points : 1)

       is the part of the deficit due to being in recession.        disappears when the economy reaches full-employment.        is the part of the deficit that would persist even at full-employment output.        is the result of congressional changes in the budget sent to Congress by the President.        is equal to the deficit other than the part accounted for by the surplus or deficit in the Social Security trust funds.

Question 10.10. The measure that shows how much of the deficit is due to a downturn in economic activity is (Points : 1)

       the structural deficit.        the real deficit.        the actual deficit        the cyclical deficit.        the budget deficit excluding Social Security accounts.

Question 2.2. If the equilibrium level of national income is less than the desired level of national income, then (Points : 1)

       the economy may be experiencing a rising price level.        there will be an export surplus.        a recessionary gap exists.        there is full employment.