Choose the correct choice from the following: 1·The national debt is equal to: A
ID: 1108319 • Letter: C
Question
Choose the correct choice from the following: 1·The national debt is equal to: A) public debt not held by foreignens B) all prior business debt C)The sum of all prior years' deficits minus surpluses D) all prior household deficits and surpluses. E) consumer debt in the nation. 2. The concept of the cyclical deficit means that budget deficits a) naturally rise and fall over the course of the business cycle b) rise in the winter and fall in the summer c) are followed by a surplus in the subsequent year d) typically turn to surpluses within five years e) always make the business cycle worse 3. In 2012, Congress debated whether to extend the temporary payroll tax cut for another year because of lingering economic weakness following the Great Recession. This policy would be an example of a) An automatic stabilizer b) Monetary policy c) Discretionary fiscal policy d) Open market operations c stabilizers consist of A government taxing and spending programs that trigger appropriate increases or decreases in the amount of aggregate demand based on the state of health of the economy without legislative action. B. government taxing and spending programs that automatically increase aggregate demand during inflationary times and decrease demand during recessions C. government taxing and spending programs that do not require a referendum by the general electorate. D. government taxing and spending programs that trigger appropriate changes in the amount of aggregate demand based on White House forecasts of the state of health of the economy E. government taxing and spending programs that trigger appropriate changes in the amount of aggregate demand based on the party in control of Congres 5. Discretionary fiscal policy results from a Congress and the President taking explicit legislative action to change government spending or taxes b fiscal policy conducted discretely as to not attract undue attention. c. policy that takes effect automatically when an economy slides into a recession d policy done at the sole discretion of Congress and cannot be vetoed by the president. e policy done at the discretion of the state govermors. 6. Janetwill receive n 5% pay raise this year If the rate of inflation averages 3% this year then A) Janet's purchasing power is falling B) it is impossible to tell what is happening to Janet's purchasing power without farther information C) Janet's purchasing power is rising D) Janet's parchasing power is unaffected by either inflation or the pay raise E) Janet's purchasung power·s rising because inflation has no effect on purchasing powerExplanation / Answer
Ans)
1.
c) The sum of al prior years' deficit minus surpluses.
The national debt is the government debt outstanding
2.
3.e) always makes the business cycles worse.
The cyclical deficit means that you received a shock and are likely to overspend the next year than the income that you receive.
c) Discretionary Fiscal policy
4.
A. government taxing and spending programs that automatically increases or decreases in the amount of aggregate demand based on the state of health of the economy without legislative action.
Automatic stabilizers as the name suggest automatically try to stabilize the economy without government intervention.
5.
a. Congress and the President taking explicit legislative action to change government spending or taxes.
For a discretionary policy, both Congress and the President have to change the fiscal policy.
6.
C0 Janets purchasing power is rising
Janets raise is 5% inflation rate is 3%
Actual raise will be 5-3=2%
Although inflation is present there still an increment so Janets purchasing power, in essence, is rising