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Essential Foundations of Economics 6e Robin Bade Michael Parkin (Test Bank All Chapters, 100% Original Verified, A+ Grade) All Chapters Are Reversed From 20-1 Part 1: CH 20-11: Page 2-1088 Part 2: CH 10-1: Page 1089-2282 1 / 4
Essential Foundations of Economics, 6e (Bade/Parkin) Chapter 20 Fiscal Policy and Monetary Policy 20.1 The Federal Budget and Fiscal Policy 1) The federal budget
- is required to balance by law.
- can have a surplus but not a deficit.
- can have a deficit but not a surplus.
- can have a deficit or a surplus but cannot be balanced.
- can have a deficit, a surplus, or a balance.
Answer: E
Topic: Federal budget process
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: NAU
AACSB: Reflective thinking
2) In the United States for the year 2012, the federal government had a ________ so the national debt was ________.
- budget deficit; increasing
- balanced budget; not changing
- budget surplus; decreasing
- budget deficit; decreasing
- budget surplus; increasing
Answer: A
Topic: Federal budget
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: MR
AACSB: Reflective thinking
3) If the federal government has a budget surplus, then it is definitely the case that
- tax revenue exceeds government outlays.
- tax revenue and government outlays are equal.
- the tax revenue is falling and government outlays are rising.
- government outlays exceed tax revenue.
- the tax revenue is rising and government outlays are falling.
Answer: A
Topic: Budget surplus
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: AA
AACSB: Reflective thinking
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4) The government has a budget surplus if
- there is no national debt.
- tax revenue is greater than outlays.
- government outlays are greater than tax revenue.
- the budget is balanced.
- a fiscal stimulus is being used to combat a recession.
Answer: B
Topic: Budget surplus
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: NAU
AACSB: Reflective thinking
5) When tax revenue exceed the government's outlays, the budget
- has a deficit and the national debt is increasing.
- is balanced and the national debt is decreasing.
- has a surplus and the national debt is decreasing.
- has a surplus and the national debt is increasing.
- None of the above because by law tax revenue cannot exceed the government's expenditures.
Answer: C
Topic: Budget surplus
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: DMC
AACSB: Reflective thinking
6) When tax revenue ________ outlays is positive, then the government has a budget ________.
- minus; surplus
- divided by; surplus
- minus; deficit
- plus; deficit
- plus; surplus
Answer: A
Topic: Budget surplus
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: BWS
AACSB: Reflective thinking
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7) When the government's expenditures exceed its tax revenue, the budget
- has a deficit and the national debt is increasing.
- is balanced and the national debt is increasing.
- has a surplus and the national debt is increasing.
- has a deficit and the national debt is decreasing.
- None of the above because by law the government's expenditures cannot exceed its tax
revenue.
Answer: A
Topic: Budget deficit
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: DMC
AACSB: Reflective thinking
8) If the federal government has a budget deficit, then it is definitely the case that
- the tax revenue exceed government outlays.
- the tax revenue and government outlays are equal.
- the tax revenue is falling and government outlays are rising.
- government outlays exceed tax revenue.
- the tax revenue is rising and government outlays are falling.
Answer: D
Topic: Budget deficit
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: AA
AACSB: Reflective thinking
9) When government outlays exceed tax revenue, the situation is called a budget
- with a negative balance.
- deficit.
- surplus.
- debt.
- with no balance.
Answer: B
Topic: Budget deficit
Skill: Level 1: Definition
Section: Checkpoint 20.1
Status: CT
AACSB: Reflective thinking
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