What does deficit spending require a government to do? a. Lay off workers b. Cut taxes c. Take on debt d. Hire more workers | Homework.Study.com (2024)

Get access to this video and our entire Q&A library

• What is budget deficit, fiscal deficit and revenue deficit?
• What is deficit spending in government economics?
• Suppose a government has no debt and a balanced budget. Suddenly it decides to spend $4 trillion while raising only $3 trillion worth of taxes. (a) What will be the government's deficit? (b) If the go
• Suppose a government has no debt and a balanced budget. Suddenly, it decides to spend $10 billion while raising only $8 billion worth of taxes. What will be the government's deficit?
• What is budget deficit? What are the main causes of government budget deficits?
• What is defined as a full-employment budget? What about structural deficit? Cyclical deficit?
• In economics, a budget deficit is the excess of government spending over revenue. What are the main causes of government budget deficits?
• Which of the following policies will reduce the government deficit? (a) Tax increases and a decrease in government spending. (b) Decreased taxes and increased government spending. (c) An increase in food stamp payments. (d) Increased investment in infrast
• What is a government budget deficit?
• What is the accumulation of deficits called? a. a budget surplus b. a budget deficit c. National debt d. International debt
• If tax revenues equal outlays on the federal budget, what does the government have? A. A budget surplus. B. A budget deficit. C. A balanced budget. D. The national debt.
• Which of the following policies will reduce the budget deficit while achieving greater fiscal restraint? a. more government expenditure and higher taxes b. more government expenditure and lower taxes c. less government expenditure and higher taxes d. less
• a. What is budget deficit and how is it related to Government debt? b. What is cyclical adjustment to deficit and how does it help to understand the stance of fiscal policy? c. What is crowding out?
• What is a budget deficit, or a budget surplus?
• Which of the following policies will definitely increase the budget deficit while achieving greater fiscal stimulus? a. greater government expenditure and lower taxes b. greater government expenditure and higher taxes c. lower government expenditure and l
• Explain what spending cuts and/or tax increases ought to be undertaken to reduce the government budget deficit sufficiently to reduce the U.S. debt-to-GDP ratio to a desirable size. Use economic analysis to support your recommendations.
• 1. What is a federal budget deficit and how would you reduce (eliminate) it? 2. How is a federal budget deficit related to a national debt? 3. Approximately what is the current level of U.S. budget
• What is the impact of the increase in spending versus the tax cuts on-budget deficit?
• What is the problem with increasing government spending if the multiplier is less than 1? (Hint: Consider how much the government had to borrow versus how much it increased real GDP.)
• Fill in the blank: Fiscal policies that favor cutting taxes rather than increasing government spending are called.
• What can the federal government do to finance a deficit? a. cut taxes b. increase spending c. reduce interest rates d. borrow funds Which of the following is a not a method of fiscal policy? a. chang
• A $40 reduction in taxes increases Real GDP by $100, and a $50 increase in government spending increases Real GDP by $120. What is tax multiplier? What is the government spending multiplier?
• a.How do federal budget deficits impact the American public? b.What should be done to decrease the deficits?
• What are "Revenue Deficit," "Effective Revenue Deficit," "Fiscal Deficit," and "Primary Deficit," as mentioned in the budget? What are the differences among them?
• What is the best way to cut taxes or boost government spending?
• Which fiscal policy measure do you think is least popular, sharp spending cuts or raising taxes? Explain.
• Which fiscal policy would help a government fight a recession due to a lack of demand? a) raising taxes b) blocking imports c) paying down the national debt d) increasing government spending
• If a government runs a budget deficit of $10 billion dollars each year for ten years, then a surplus of $1 billion for five years, and then a balanced budget for another ten years, what is the government debt?
• Suppose the government spending is 3.2 trillion, and taxes collected are 2.9 trillion. What is the federal government deficit in that year?
• Suppose the US government wants to balance the government budget. What must government spending increase or decrease?
• Under what conditions will a larger budget deficit cause a trade deficit?
• Suppose the economy is slumping into recession and needs a fiscal policy boost. Voters, however, are opposed to larger federal deficits. What would policy-makers do? Explain
• What is a budget deficit?
• The CBO is projecting the government deficit to increase, given the current tax law because of increased expenditures on programs that do what?
• A) What is the federal government budget? B) What is the difference between a government deficit and the government debt?
• What is the federal debt? How does the surplus or deficit affect the federal debt?
• Which of the following would help a government reduce an inflationary output gap? a. Raising taxes b. Lowering taxes c. Increasing government spending d. Decreasing government spending
• Out of fiscal and revenue deficit, which is better for economy?
• What is revenue and fiscal deficits and what do they imply?
• Which of the following represents the most expansionary fiscal policy? A. A $10 billion tax cut. B. A $10 billion increase in government spending. C. A $10 billion tax increase. D. A $10 billion decrease in government spending.
• Which of the following fiscal policies would decrease interest rates: a) The government increases government spending and increases its borrowing, b) The government collects more in tax revenue than it spends and uses it to pay down the national debt, c)
• What can the federal government do to finance a deficit?
• If the economic stimulus bill was $787 billion with $281 billion in new tax cut and MPC = .8, what's the increase in tax cuts and government spending?
• Which would be better for stimulating the economy; a tax cut, or a spending increase? Why do you think as you do?
• What is the main reason for government deficit spending?
• Which of the following fiscal policy changes would be the most contractionary? a. a $40 billion increase in taxes b. a $10 billion increase in taxes and a $30 billion cut in government spending c. a $20 billion increase in taxes and a $20 billion cut in g
• A) What are the effects on the government budget deficit and output of an increase in T? B) What are the effects on the government budget deficit and output of a decrease in G?
• What role do fiscal and monetary policies have that lead to higher or lower budget deficits?
• Which of the following would increase GDP by the greatest amount? a. $20 billion reduction in taxes b. $20 billion increases in both government spending and taxes c. $20 billion decreases in both government spending and taxes d. $20 billion increase in go
• What causes a budget deficit and a budget surplus?
• What is the mechanism by which an increase in government spending or a tax cut stimulates the economy? A) Government purchases of goods and services increase aggregate demand, boosting equilibrium out
• What are revenue, deficit, and debt, and how does it play a role in the U.S. government?
• Which of the following is an expansionary fiscal policy? a. Increase in taxes increases in government spending decrease in taxes decrease in government spending. b.Both increase in taxes and decrease
• If government spending decreases and taxes increase: a. the government deficit will get smaller and possibly become a surplus. b. the government surplus will get smaller and possibly become a deficit. c. the public debt will increase at a faster rate than
• A government takes in $200,000,000 in tax revenue and spends $175,000,000. Is the government running a surplus or a deficit? Of how much?
• What is the effect of a decrease in both government spending and taxes by the same amount? A. GDP will fall but unemployment will rise. B. GDP will rise and unemployment will fall. C. Both GDP and unemployment will fall. D. Both GDP and unemployment w
• What is the difference between revenue deficit and fiscal deficit?
• A) Does government budget deficit matter? Explain. B) What are major reasons for the U.S. government budget deficit? Give examples.
• A decrease in which of the following would decrease the tax wedge? a. marginal tax rate b. money supply c. national debt d. federal budget deficit
• What is contractionary fiscal policy? Contractionary fiscal policy refers to a decrease in government expenditures and/or a(n) in taxes.
• What is the necessary increase in government spending, if the desired increase to GDP is 100 Billion and the government spending multiplier is 3?
• Which of the following fiscal policy changes would be the most contractionary? a. a $10 billion increase in taxes and a $30 billion cut in government purchases b. a $30 billion increase in taxes and a $10 billion cut in government purchases c. a $20 billi
• Which policy will reduce the budget deficit while keeping output constant?
• Define a budget deficit in an economy/country and the result of having that deficit.
• Suppose the federal government cuts taxes and increases spending, raising the budget deficit to 12 percent of GDP. If nominal GDP is rising 5 percent per year, are such budget deficits sustainable forever? Explain. If budget deficits of this size are main
• Which of these is not a result of the federal government spending more than it earns? A) Budget deficits B) Budget surpluses C) Increased national debt D) Increased taxes
• How will a cut in Government Spending of $300 billion with a MPC equal to 0.75 impact the budget deficit and the national debt?
• Which fiscal policy can be used to stimulate aggregate demand? a. Decrease the money supply. b. Decrease expenditures, and increase taxes. c. Decrease taxes, and increase expenditures. d. All of the above.
• What must take place for the government to run deficits without any crowding out?
• 1)Suppose that the government expenditure went up by $5 billion, while tax revenue dropped by $3 billion. a)Is this policy expansionary? b)By how much did government deficit and surplus grow or d
• What's the difference between revenue deficit and budgetary deficit?
• Suppose that the government expenditure went up by 5 billion dollars, while tax revenue went up by 3 billion dollars. Is this policy expansionary? By how much did government deficit and surplus grow o
• Which of the two fiscal stimulus tools will ultimately have the same impact on aggregate spending? a) $100 billion tax cut and $100 billion increase in government spending. b) $100 billion increase in
• Under what scenario could fiscal policy make a recession even worse? a. If deficit financed fiscal policy increases the national debt to the point it scares investors away and decreases spender confidence b. If the multiplier is bigger than 1 c. If tax
• Which of the following government policies would increase aggregate demand? a. A stimulation of consumption through an increase in taxes b. A surplus in the government budget c. a decrease in government spending d. a deficit in the government budget
• What is the role of budget deficit in the growth rate of the economy?
• If the economy is expecting a severe recession, which fiscal policy would you recommend? a. Reduce spending for welfare programs, b. Reduce overall government spending, c. Increase taxes to reduce consumption, d. Reduce personal and corporate income taxes
• If the economy is in a mild recession, which of the following policies will stimulate the economy without causing a budget deficit? a. Congress increases taxes by $5 billion. b. Congress decreases taxes by $5 billion. c. Congress votes to increase spendin
• What impact does reducing tax revenue (tax cuts) have on the deficit?
• If an economy is already in a recession, which tool is most effective to bring it out - increasing government spending or decreasing taxes?
• What is the basic mechanism through which tax cuts increase government revenue?
• What is the annual difference between federal spending and revenues called? A. The deficit B. Spending as a percentage of GDP C. The national debt held by the public D. Tax revenue shortfall
• Explain the increase in budget deficit during recession even without countercyclical fiscal policy.
• What is the effect of an increase in government budget deficits on interest rate?
• Suppose the economy is slumping into recession and needs a fiscal policy boost. The majority of voters, however, are opposed to larger federal deficits. What should Congress and the president do? Should they stimulate the economy to lessen unemployment or
• A Federal budget deficit exists when a) Federal government assets are less than liabilities. b) Federal government spending exceeds tax revenues. c) Federal government taxation is decreasing. d) Federal government spending is increasing.
• Assume the federal government initially has a balanced budget. A cut to taxes without a corresponding spending cut will create a budget deficit. What would happen if the deficit was financed by printing new money?
• Fill in the blank: Fiscal policies that favor increasing government spending rather than adjusting taxes are called.
• What's the difference between revenue deficit, fiscal deficit, budgetary deficit and primary deficit?
• A) What are some of the causes of deficits since the 1800's? B) How does the government raise the money to finance the deficits?
• Which of the following fiscal policies is likely to be most effective when the economy is experiencing an inflationary gap? A. The government decreases taxes and keeps spending unchanged. B. The government increases spending and keeps taxes unchanged. C.
• Answer the following questions. a. If the current budget shows a deficit, what would an increase in taxes do to it? b. What would that increase in taxes do to aggregate demand? c. When would an increase in taxes be an appropriate contractionary fiscal
• a. What is a government budget deficit? b. How does a federal budget deficit affect the economy? c. How does it affect the level of investment and interest rates? d. How does it affect the individual consumer? Give at least three examples in your respo
• a. What is a government budget deficit? b. How does the federal budget deficit affect the economy? c. How does it affect the level of investment and interest rates? d. How does it affect the individual consumer? Give at least three examples.
• The national debt is the amount: A) by which government tax revenue exceed outlays in a given year B) of debt outstanding that arises from past budget deficits C) by which government outlays exceed tax revenue in a given year D) of government outlays summ
• What type of policy would reduce a budget deficit?
• Which of the following was not a cause of the U.S. budget deficits in the 1980s? a. recessions in the early 1980s b. a substantial increase in government spending c. expansion of existing government programs d. a substantial decrease in tax rates e. a rel
• Which of the following would help a government reduce an inflationary output gap? a. raise the tax rate and increase government spending b. reduce the tax rate and decrease government spending c. raise the tax rate and decrease government spending d. redu
• Which statements accurately describe debts and deficits? Check all that apply. A) Debt is free and does not affect a government. B) A government's budget deficit causes debt to increase. C) A government's budget deficit causes debt to decrease. D) Deb