Chapter 15 Terms – Flashcards
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to manage the federal government's budget
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what is the roe of the OMB?
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to keep the government running when the budget has not been approved
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what is the purpose of "stop-gap funding"?
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cutting taxes
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which of the following is an example of expansionary fiscal policy?
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to encourage of the growth and try to prevent a recession
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why does the government sometimes use an expansionary fiscal policy?
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state and local government policies might interfere with the intended outcome of federal policies
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"coordinating fiscal policy" one of the five limits of fiscal policy, can be difficult because
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the need for discretionary spending
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all of the following are reasons why it is difficult to implement balanced fiscal policy EXCEPT
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when congress and the president cannot agree on temporary funding
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what will lead directly to a government's "shut down"?
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president and congress pass a new 2-cent-per-gallon gasoline tax
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which of the following is a contractionary fiscal policy?
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two-thirds of all government spending is on entitlements, which the government cannot easily alter
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why is it difficult for the federal government to increase or decrease spending?
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federal agency estimates
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the federal budget process begins with
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cutting taxes
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example of expansionary fiscal policy
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the executive Office of the president
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the OMB is part of
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fiscal policies, like lower spending and higher taxes, that reduce economic growth
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contractionary policies
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increase output
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the purpose of expansionary fiscal policy is to
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wait for the economy to achieve equilibrium`
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after the fall of the economy of 1929, what did the classical economists believe to be the solution to the Great Depression?
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taxes
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which of the following is an example of a automatic stabilizer?
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that taxes have a strong negative influence on economic output
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what do supporters of supply-side economics believe?
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tax revenues
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the laffer curve predicts the effects of changes in the tax rate on which of the following?
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high inflation during the 1970's[late under the Reagan ad]
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Keynesian economics failed to deal with
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FDR
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which of the following presidents increased top marginal tax rates during his term in office?
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takes a broader view of the economy
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in contrast with classical economics, Keynesian economics
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the government should reduce taxes to promote economic-growth by increasing aggregate supply
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which of the following statements is a fundamental part of supply-side economics?
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Keynesian economics
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which economic school of thought would explain how massive government expenditures during WW ll sharply moved the country out of the Great Depression?
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cutting taxes
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a supply-side economist would be in favor of
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there is a budget surplus
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when revenues exceed expenditures,
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the cost of running a war
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which of the following is not a reason the national debt rose during 1ronald Reagan's office
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that it makes investing in treasury bonds, notes, and bills very risky
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which of the following is not a problem associated with high national debt?
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a big federal budget deficit
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what leads directly to the crowding-out effect?
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most states require a balanced budget for state spending
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which of the following would be an accurate statement about achieving a balanced budget?
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increased deficits
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which can be expected when members of the baby boom generation begin to retire in large numbers?
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there is a recession
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which of the following situations would cause a budget deficit for the federal government?
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you are loaning money to the government
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what is occurring when you buy a U.S. savings bond?
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the government issues treasury bonds and spends the revenue on a new highway system
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which of the following statements best describes a stage in the crowding-out effect?
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a decrease in government spending
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which of the following did not contribute to the federal budget surplus in the 1990's?
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calculating a budget deficit
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if government officials are calculating the amount of money the federal government borrows for one fiscal year, they are
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treasury bill
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which is a short term bond that must be paid within a year or less?
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paying interest in the debt
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servicing the debt is
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the loss of funds for private investments due to government borrowing
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what is the crowding out effect?
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surpluses for the first time in 30 years
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what was the state of the federal budget at the start of the twenty-first century?
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calculating a budget deficit
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If government officials are calculating the amount of money the federal government borrows for one fiscal year, they are _____. calculating a budget deficit preparing an appropriations bill calculating the productive capacity calculating the national debt
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The President will sign the budget into law or veto it and send it back to Congress.
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Congress has just passed several bills outlining the federal budget. What is the next step in the budget process? The Office of Management and Budget will analyze the budget and approve or reject it. The President will sign the budget into law or veto it and send it back to Congress. The federal budget will be sent to the 50 state legislatures for approval or rejection. The new budget will automatically become law
