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Multiple Choice Quiz
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1
Which of the following emphasizes incentives and tax cuts as a means of increasing economic growth?
A)real-business cycle theory
B)efficiency wage theory
C)supply-side economics
D)the rational-expectations hypothesis
2
Which of the following occurs when all taxes and other revenues exceed government expenditures for a year?
A)budget surplus
B)balanced budget
C)budget deficit
D)government debt
3
Which of the following describes the situation where revenues and expenditures are equal during a given period?
A)budget surplus
B)balanced budget
C)budget deficit
D)government debt
4
Which of the following exists when expenditures exceed revenue from taxes?
A)budget surplus
B)balanced budget
C)budget deficit
D)government debt
5
Which of the following consists of the total or accumulated borrowings by the government?
A)budget surplus
B)balanced budget
C)budget deficit
D)government debt
6
Which of the following refers to the use of taxes and public expenditures to help dampen the swings associated with the business cycle?
A)monetary policy
B)fiscal policy
C)balanced budget
D)government debt
7
Which of the following records the actual dollar expenditures, revenues, and deficits in a given period?
A)actual budget
B)structural budget
C)cyclical budget
D)none of the above.
8
Which of the following calculates what government revenues, expenditures, and deficits would be if the economy were operating at potential output?
A)actual budget
B)structural budget
C)cyclical budget
D)none of the above.
9
Which of the following is the difference between the actual budget and the structural budget?
A)actual budget
B)structural budget
C)cyclical budget
D)none of the above.
10
A large government debt tends to _______ the growth in potential output because it displaces private capital, _______ the inefficiency from taxation, and forces a nation to _______ consumption to service its foreign borrowing.
A)reduce; reduces; reduce
B)increase; increases; reduce
C)reduce; increases; reduce
D)increase; increases; increase





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