Why are most people in favor of government spending?

They want more money spent on them

They favor higher interest rates

Why are expenses such as wars and natural disasters difficult to manage?

They are always included in the budget

What does deficit spending mean?

Spending in excess of revenues collected

Cutting government expenditures

When does the government sometimes plan deficit spending?

In advance, as part of its strategy

What impact can unexpected developments have on the budget?

Drop in revenues or rise in expenditures

What does the actual deficit at the end of the fiscal year depend on?

Reporting of expenditures and the economy

What was not included in the fiscal year 2007 budget?

Funding for wars in Afghanistan and Iraq

How did the president and Congress cover anticipated war costs?

By making supplemental requests

Why did the war expenditures not appear in the initial budget release?

They were not included in the initial budget

They were moved to another department

They were hidden in defense spending

What two factors help shrink the deficit during economic growth?

Higher tax collections and lower unemployment claims

Lower interest rates and inflation

Government borrowing and spending

Currency devaluation and tariffs

What effect can a downturn in the economy have?

Lower tax collections and higher unemployment insurance payments

What does Panel A of Figure 10.4 show?

History of the federal budget deficit since 1965

How does the government finance its deficit?

By selling U.S. Treasury notes and securities

What causes the national debt to grow, as shown in Panel B of Figure 10.4?

Government spending more than it collects

When does the amount of total debt go down?

When there is a federal budget surplus

What are government trust funds used for?

Funding programs like Social Security and Medicare

How is the trust fund money managed before being paid out?

Invested in government securities

Why do economists often disregard trust fund debt?

Because it’s money the government owes itself

Why can the country never go bankrupt despite the size of the public debt?

Because of key differences between public and private debt

Because it prints its own money

Because debt is forgiven annually

Because it borrows from other countries

What is a key difference between public and private debt regarding ownership?

Most of the national debt is owed to ourselves

Private debt is always forgiven

How is repayment typically handled by private citizens?

They plan to repay by a specific date

How does the government typically repay its debt?

By issuing new bonds to pay off old ones

Why doesn’t the federal government lose purchasing power when repaying debt?

Because taxes are transferred between groups

Because it gets international aid

Eco 10.3 pages 277-283 -pd 4

Authored by Justin Beyersdorfer

Social Studies

12th Grade

Used 1+ times

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107 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How many times has the federal budget shown a surplus in the past 45 years?

Five times

Ten times

Seven times

Three times

Nine times

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In what year did the first federal budget surplus occur?

1969

1972

1955

1981

1990

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Between which years did the last four federal budget surpluses occur?

1998 to 2001

2000 to 2003

1995 to 1998

1990 to 1993

1988 to 1991

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What has been the effect of federal budget deficits in most years?

Increased government debt

Reduced government spending

Increased tax revenues

Reduced national debt

Eliminated borrowing

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How much debt has been added since 2001?

More than $2 trillion

Less than $500 billion

Exactly $1 trillion

About $3.5 trillion

$500 million

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the approximate total national debt mentioned in the text?

About $8.5 trillion

$2.3 trillion

$6.1 trillion

$10 trillion

$4.5 trillion

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is one reason deficits occur, according to the text?

Tax reductions are politically popular

Balanced budgets are required

High employment rates

Foreign investments increase

Surpluses are avoided

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Eco 10.3 pages 277-283 -pd 4

How many times has the federal budget shown a surplus in the past 45 years?

In what year did the first federal budget surplus occur?

Between which years did the last four federal budget surpluses occur?

What has been the effect of federal budget deficits in most years?

How much debt has been added since 2001?

What is the approximate total national debt mentioned in the text?

What is one reason deficits occur, according to the text?

Why are most people in favor of government spending?

Why are expenses such as wars and natural disasters difficult to manage?

What is stated about expenditures not recorded in the budget?

Access all questions and much more by creating a free account

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