Homework Answers
Answer : the price level would rise, so the value of money would fall.
A higher budget deficit will lead to lower tax rates and at the same time there will be higher government expenditures which will result into higher Aggregate Demand and this may cause Inflation.Therefore the price level would rise, so the value of money would fall.
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In 2010 the U.S. government was running a large budget deficit. Some were concerned that pressure...
Are federal budget deficits related to trade deficits? A. Yes, but only if the quality of U.S. goods and services is deteriorating B. No. The budget deficit is entirely a domestic matter, while the...
Are federal budget deficits related to trade deficits? A. Yes, but only if the quality of U.S. goods and services is deteriorating B. No. The budget deficit is entirely a domestic matter, while the trade deficit only affects U.S. citizens who travel abroad. C. Yes. Higher deficit spending goes up results in more government borrowing, and foreign residents who lend funds to the U.S. government have fewer resources to spend U.S. export goods. D. Yes. If U.S. consumers buy too...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billio...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by...
Suppose that the U.S. government significantly increases its
budget deficit and finances the resulting debt by selling
government bonds to Canadians. What would be the impact of this
action on the bond markets
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by selling government bonds to Canadians. What would be the impact of this action on the bond markets.
6. Monetizing the deficit One of the major objections to government budget deficits is that they...
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The government finances the budgetary deficit by A) from the public (through the sale of B)...
The government finances the budgetary deficit by A) from the public (through the sale of B) issued by the U.S. Treasury), or from other countries (such as China), or from the Federal Reserve System (we’ll get into that in the next module). People holding U.S. government Treasury Bills, Treausry notes and Treasury bonds are C) (lenders/borrowers – fill in the number from the word bank) to/from the federal government. The total amount owed by the federal government is known as...
If a government went from a deficit to a surplus, government debt would decrease, the supply...
If a government went from a deficit to a surplus, government debt would decrease, the supply of loanable funds would shift to the right and interest rates would fall. Select one: True False People who buy stock in a corporation such as Honda become part owners of Honda, so the benefits of holding the stock depend on Honda's profits. Select one: True False When large corporations, the federal government, or state and local governments need to borrow to finance their...
9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve...
9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve System D) Senate Committee on Banking and Finance. 10. Ceteris paribus, if the Fed raised the required reserve ratio A) Banks could increase their lending B) The Federal funds interest rate would rise. The size of the monetary multiplier would decrease. D) The size of the monetary multiplier would increase. 11. Money is created when A) Loans are made. Checks written on one bank...
18 Congress has the legal right to force the Federal Reserve Bank to accept and carry...
18 Congress has the legal right to force the Federal Reserve Bank to accept and carry out their suggested recommendations regarding Monetary Policy. 8 03:57:44 True or False True False 19 The Federal Reserve Bank is the chief regulatory agency among all of the financial regulatory agencies like the SEC, FDIC, etc... The Federal Reserve Bank has the most regulatory power. 03:57:40 Multiple Choice This is foise - the US Treasury Department has the most regulatory power in the U.S....
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to appreciate b)exports increase c)interest rates decrease d)demand for loanable funds decrease e)decreases merchandise trade deficit 2. When the Fed decreases money supply to combat inflation, it cuases: a)the price of the U.S. dollar to decrease b) capital to flow out of the US c)an increase in the merchandise trade deficit d)an increase in private spending e) a decrease in the interest rates 3. Which...
Since 1990, in how many years has the U.S. government had a budget surplus? Choose one: A. 0 B. 3 C. 4 D. 18 The Feder...
Since 1990, in how many years has the U.S. government had a
budget surplus?
Choose one:
A. 0
B. 3
C. 4
D. 18
The Federal Budget Deficit The U.S. federal government has run a budget deficit for almost the entire past hal-century. The graph below plots federal revenue against outlays as a percentage of GDP, a measurement that stays consistent as the size of the economy changes. Note that the deficit is particularly Ukely to increase during recessions, as...
18. Suppose that at the end of 2014, the government holds debt of $150 billion, has collected tax revenue of $50 billion, and has spent $75 billion. The national debt at the beginning of 2015 is: A) $25 billion. B) $125 billion. C) $175 billion. D) $275 billion. 19. What approach to federal finance would you agree with if you wanted federal government revenues to equal federal government expenditures every year? A) annually balanced budget B) cyclically balanced budget C)...
Suppose that the U.S. government significantly increases its
budget deficit and finances the resulting debt by selling
government bonds to Canadians. What would be the impact of this
action on the bond markets
Suppose that the U.S. government significantly increases its budget deficit and finances the resulting debt by selling government bonds to Canadians. What would be the impact of this action on the bond markets.
6. Monetizing the deficit One of the major objections to government budget deficits is that they may be inflationary. In addition, some worry that the Federal Reserve may monetize part of the deficit by buying some of the newly issued debt, potentially causing even more inflation. In general, a tax cut increases both real GDP and the price level, since it causes aggregate demand to increase. The following graph shows the demand and supply of bank reserves. Show the initial...
9 In the U.S econormy the money supply is cot A) U.S Treasury. B) Federal Reserve System D) Senate Committee on Banking and Finance. 10. Ceteris paribus, if the Fed raised the required reserve ratio A) Banks could increase their lending B) The Federal funds interest rate would rise. The size of the monetary multiplier would decrease. D) The size of the monetary multiplier would increase. 11. Money is created when A) Loans are made. Checks written on one bank...
18 Congress has the legal right to force the Federal Reserve Bank to accept and carry out their suggested recommendations regarding Monetary Policy. 8 03:57:44 True or False True False 19 The Federal Reserve Bank is the chief regulatory agency among all of the financial regulatory agencies like the SEC, FDIC, etc... The Federal Reserve Bank has the most regulatory power. 03:57:40 Multiple Choice This is foise - the US Treasury Department has the most regulatory power in the U.S....
Since 1990, in how many years has the U.S. government had a
budget surplus?
Choose one:
A. 0
B. 3
C. 4
D. 18
The Federal Budget Deficit The U.S. federal government has run a budget deficit for almost the entire past hal-century. The graph below plots federal revenue against outlays as a percentage of GDP, a measurement that stays consistent as the size of the economy changes. Note that the deficit is particularly Ukely to increase during recessions, as...
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