Questions and Answers
What does deficit spending require a government to do?
When a government creates a budget, it is seeking a way to:
Which of these effects of expansionary spending would a government most want to avoid?
The graph shows the federal debt between 1993 and 2013. What trend about the federal debt does the graph reveal?
Signup and view all the answers
The graph shows government spending as a percentage of GDP from 1990 to 2012. At its peak, government spending made up about:
Signup and view all the answers
The graph shows the federal budget from 1980 to 2010. In which period did the federal budget show the greatest deficit?
Signup and view all the answers
When revenues are higher than expenditures in a budget, that budget:
Signup and view all the answers
This diagram shows a government's approach to taxing and spending. Which of the following would be a good title for this diagram?
Signup and view all the answers
What is the main goal in creating the federal budget?
Signup and view all the answers
When governments inject money into the economy, which of the following are their goals? (Check all that apply)
Signup and view all the answers
Study Notes
Deficit Spending and Government Debt
- Deficit spending requires a government to take on debt to finance its expenditures.
- The federal debt has been on an increasing trend from 1993 to 2013, indicating persistent borrowing.
Government Budgeting
- When creating a budget, a government aims to allocate money effectively to various programs and projects.
- A budget that shows revenues higher than expenditures signifies a surplus, while the opposite indicates a deficit.
Expansionary Spending Effects
- While higher employment, growth in production, and consumer spending are desirable outcomes of expansionary spending, higher inflation is an effect to avoid.
Government Spending as a Percentage of GDP
- At its peak from 1990 to 2012, government spending accounted for about one-quarter of GDP.
Federal Budget Deficits
- The greatest federal budget deficit occurred from 2000 to 2010, reflecting increased spending without corresponding revenue.
Fiscal Policy Insights
- Fiscal policy encapsulates a government's strategies for taxing and spending to manage the economy, targeting stability, reduced unemployment, and improved production.
- Effective fiscal policy also encompasses encouraging competition within the market.
Federal Budget Management Goals
- The primary goal in crafting the federal budget focuses on managing government tax revenue and expenditures for economic balance and stability.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Explore the intricacies of fiscal policy with this quiz focused on government spending and budgeting. Test your knowledge on key concepts, including deficit spending and budget allocation strategies. Ideal for students looking to deepen their understanding of economic policies.