Economics Topic 9 Review Questions with Correct Answers (Grade
A+)
Question 1: Human Resources spending (Social Security, Medicare) make up how much of the budget?
Answer: 77% (largest)
Question 2: What is the first step in creating a federal budget?
Answer: federal agencies write an estimate of what they need
Question 3: Public works projects are examples of what type of fiscal policy?
Answer: expansionary
Question 4: How do Keynesian economists differ from classical?
Answer: they rely on government and maximize production
Question 5: What was the common view during the Great Depression of Roosevelt's New Deal?
Answer: required bold responses (cartoon on test)
Question 6: What Economic Theory does increasing taxes run counter to?
Answer: supply side
Question 7: What does the Laffer Curve believe is true about raising taxes?
Answer: revenue will fall
Question 8: In what 10 year span has the government run the largest deficits?
Answer: 2000-2010
Question 9: What is the opportunity cost of federal servicing of the debt?
Answer: less to spend on infrastructure or defense
Question 10: What problem is illustrated by the political tug of war about fiscal policy?
Answer: ordinary citizens can suffer the consequences because of political fighting
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A+)
Question 1: Human Resources spending (Social Security, Medicare) make up how much of the budget?
Answer: 77% (largest)
Question 2: What is the first step in creating a federal budget?
Answer: federal agencies write an estimate of what they need
Question 3: Public works projects are examples of what type of fiscal policy?
Answer: expansionary
Question 4: How do Keynesian economists differ from classical?
Answer: they rely on government and maximize production
Question 5: What was the common view during the Great Depression of Roosevelt's New Deal?
Answer: required bold responses (cartoon on test)
Question 6: What Economic Theory does increasing taxes run counter to?
Answer: supply side
Question 7: What does the Laffer Curve believe is true about raising taxes?
Answer: revenue will fall
Question 8: In what 10 year span has the government run the largest deficits?
Answer: 2000-2010
Question 9: What is the opportunity cost of federal servicing of the debt?
Answer: less to spend on infrastructure or defense
Question 10: What problem is illustrated by the political tug of war about fiscal policy?
Answer: ordinary citizens can suffer the consequences because of political fighting
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