Question

The government has a budget surplus if

government outlays are greater than tax revenues.

there is no national debt.

a fiscal stimulus is being used to combat a recession.

tax revenues are greater than outlays.

the budget is balanced.

When government outlays exceed tax receipts, the situation is called a budget

surplus.

with a negative balance.

debt.

with no balance.

deficit.

The national debt is the amount

by which government tax receipts exceed expenditure in a given year.

by which government expenditure exceeds tax receipts in a given year.

of government expenditures summed over time.

of all future entitlement spending.

of debt outstanding that arises from past budget deficits.

Social Security benefits and expenditures on Medicare and Medicaid are classified as

production of goods and services.

debt interest.

transfer payments.

purchases of goods and services.

Discretionary fiscal policy is a fiscal policy action, such as

an increase in payments to the unemployed, initiated by the state of the economy.

an interest rate cut, initiated by an act of Congress.

a tax cut, initiated by an act of Congress.

an increase in the quantity of money.

a decrease in tax receipts, initiated by the state of the economy.

Needs-tested spending ________ during recessions and ________ during expansions.

increases; increases

decreases; decreases

increases; decreases

decreases; increases

Answer 1

tax revenues are greater than outlays
(If tax revenues of the government exceeds its spending or total outlays then government has a budget surplus.)

deficit
(When spending or total outlays of government exceeds its tax revenues then it is said to have a budget deficit)

of debt outstanding that arises from past budget deficits
(Debt means borrowings of the government due to budget deficit. National debt is the sum of all outstanding budget deficits.)

transfer payments
(Transfer payments are the benefits provided without charging anything.)

a tax cut, initiated by an act of congress
(Discretionary fiscal policy means change in government spending or taxes by the government)

increases; decreases
(Needs tested spending is spending on prgrams for people who qualify to receive benefits. During recession, people who qualify who such benefits increases so needs tested spending increases and during expansion, people who qualify who such benefits decreases so needs tested spending decreases.)