Macro Economics Exam Questions
with Correct Answers
When considering budget deficits in the national debt? - Answer-The national debt is a
stock variable and a Federal budget deficit is a flow variable.
A trade deficit implies that - Answer-The dollar value of imports exceeds the dollar value
of exports.
Generally a large US trade deficit is accompanied by a - Answer-A larger US federal
government budget deficit
The accumulation of borrowing by all federal government agencies is referred to as the -
Answer-Gross public debt
When considering the gross public debt, one can argue that it is overstated because -
Answer-The federal government owes itself money
When considering the expenditures of the federal government? - Answer-- the
expenditures are used for entitlements
-the expenditures are used for investments in the country's infrastructure
-the expenditures are used for the purchases of goods and services by the federal
government
If the economy is operating at full unemployment in the federal government increases its
borrowing then... - Answer-Investors will be crowded out
Time lags - Answer-They take 1 to 3 years to take into effect
1. Recognition (seeing that there is a problem)
2. Action (making a plan)
3. Effect ( to see results)
Direct expenditure offsets - Answer-actions on the part of the private sector in spending
income that offsets government fiscal policy actions. Any increase in government
spending in an area that competes with the private sector.
Aggregate expenditure - Answer-A measure of national income that is somewhat similar
to gross domestic product (GDP). The total value of annual goods and services
production within a country that only counts items that are actually purchased (at market
prices).
with Correct Answers
When considering budget deficits in the national debt? - Answer-The national debt is a
stock variable and a Federal budget deficit is a flow variable.
A trade deficit implies that - Answer-The dollar value of imports exceeds the dollar value
of exports.
Generally a large US trade deficit is accompanied by a - Answer-A larger US federal
government budget deficit
The accumulation of borrowing by all federal government agencies is referred to as the -
Answer-Gross public debt
When considering the gross public debt, one can argue that it is overstated because -
Answer-The federal government owes itself money
When considering the expenditures of the federal government? - Answer-- the
expenditures are used for entitlements
-the expenditures are used for investments in the country's infrastructure
-the expenditures are used for the purchases of goods and services by the federal
government
If the economy is operating at full unemployment in the federal government increases its
borrowing then... - Answer-Investors will be crowded out
Time lags - Answer-They take 1 to 3 years to take into effect
1. Recognition (seeing that there is a problem)
2. Action (making a plan)
3. Effect ( to see results)
Direct expenditure offsets - Answer-actions on the part of the private sector in spending
income that offsets government fiscal policy actions. Any increase in government
spending in an area that competes with the private sector.
Aggregate expenditure - Answer-A measure of national income that is somewhat similar
to gross domestic product (GDP). The total value of annual goods and services
production within a country that only counts items that are actually purchased (at market
prices).
