Question

2) A spike in “All Other Outlays” of the federal government in 2009 was due to:

a) an increase in the financial aid given to Greece earlier that year.

b) an increase in the expenditures on Social Security and Medicare.

c) the fiscal stimulus package passed earlier that year.

d) a sudden increase in military expenditure as a result of the war in Iraq.

e) an increase in the national debt earlier that year.

3) In 2016, welfare spending accounted for almost _____ of federal outlays.

5 percent

10 percent

14 percent

20 percent

31 percent

4)When a budget is not approved in time, _____.

agencies operate on the basis of continuing resolutions

agencies operate on the basis of a budget resolution developed by budget committees

agencies tend to shut down

the President can force Congress to act

agencies borrow from the Federal Reserve

6) Which of the following would decrease the size of a federal budget deficit?

A recession

An increase in defense spending

An increase in the use of automatic stabilizers

An increase in taxes

An increase in transfer payments

7)Which of the following is true of an annually balanced federal budget?

Most economists agree that the federal government should balance its budget just as each household does.

Such a policy would require the government to increase its spending when tax receipts decrease.

Such a policy became popular between the 1930s and 1960s.

Such a policy guarantees that an economy is its potential level.

Such a policy could worsen a contractionary gap.

13) Deficits that arise from discretionary fiscal policy lead to a(n):

increase in the demand for money, which is offset by the sale of more government securities.

decrease in the demand for money, which is offset by the sale of more government securities and an increase in interest rates.

increases in the number of government securities sold to the public and higher interest rates.

decreases in the number of government securities sold to the public and an increase in interest rates.

increases in the public's demand for money and a decrease in the number of government securities sold to the public, leading to lower interest rates.

15) Which of the following components of aggregate expenditure is most subject to crowding out?

Consumption expenditures

Investment spending

Imports

Government purchases of goods and services

National saving

16) Increased government borrowing to cover a budget deficit results in:

a higher interest rate and the depreciation of the U.S. dollar.

a higher interest rate and the appreciation of the U.S. dollar.

a lower interest rate and the depreciation of the U.S. dollar.

a lower interest rate and the appreciation of the U.S. dollar.

increased purchases of foreign assets by U.S. residents.

17) The federal budget experienced surpluses from _____.

1998 to 2001

2002 to 2006

1970 to 1973

1991 to 1994

1985 to 1988

18) The budget deficit increased during the Great Recession of 2007-2009 and the financial crisis of 2008 increased the budget deficit because of:

an increase in the tax rates for high-income households.

a sudden increase in terrorist attacks and anthrax scares in the economy.

low interest rates that crowded out private investment.

discretionary tax cuts and greater outlays on unemployment benefits.

greater outlays on national defense spending.

Answer 1

1) c) the fiscal stimulus package passed earlier that year.

.There are some obligations in Federal spending process . Certain programes where authority is there to spend money become the obligations later on . Then the Treasure has to spend money which is known as outlays . Fiscal stimulus package was passed to combat the massive recession that occured in 2008 .

2) In 2016, welfare spending accounted for almost _____ of federal outlays.

Answer : 20 percent

3)When a budget is not approved in time, _____.

Answer : agencies tend to shut down

4) Which of the following would decrease the size of a federal budget deficit?

Answer :An increase in taxes

Budget deficit refers to the situation when expenditure exceeds revenue . So to decrease the size of a federal budget deficit expenditure should fall or revenue should rise . Taxes are the most inportant source of government revenue .