Question

1.What is the net public debt?

a. Gross Debt minus depreciation b. Debt that is paid back divided by debts that have been written off c. Gross debt minus interagency borrowing d. Debt that is not delinquent (i.e., behind in payments) e. Nominal debt minus real debt

2. Which of the following is an example of an automatic stabilizer?

a. The Reagan Tax Cute of 1982 b. Unemployment insurance c. Reducing regressive taxes d. Allowing banks to automatically deduct tax payments from customer bank accounts

3. What is expansionary fiscal policy?

a. Increasing the money supply b. Decreasing the money supply c. Reducing income taxes or increasing government expenditure d. Reducing all types of disintermediation e. Raising taxes or cutting government expenditures

4. What is a progressive tax?

a. a tax that is fair b. a tax that is easy to pay c. a tax that is uniform d. a tax that the rich pay a larger percent of their income on e. a tax where everyone, regardless of income status, pay the same percent of their income on f. a tax that lower income groups pay a larger percent of their income on g. a tax that does not create an incentives problem h. a tax that they pay, but we don't

Answer 1

1.Ans: C) Gross debt minus interagency borrowing

Explanation:

Net public debt = Gross debt - interagency borrowing

Interagency borrowing refers to  borrowing by the government through issuance of securities, bonds and bills.

2.Ans: C) Unemployment insurance

3.Ans: C)  Reducing income taxes or increasing government expenditure

Explanation:

Expansionary fiscal policy refers to an increase in government expenditure and decrease in tax rate. It increases money supply in the economy.

4.Ans: d) a tax that the rich pay a larger percent of their income on.

Progressive tax is based on the ability to pay principle of taxation.