Suppose that us debt is 7 trillion at the beginning

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Chapter 13(28)- Fiscal Policy

227 .   The stability pact signed in 1999 by the European nations that adopted the euro required each country to :
A ) balance its budget annually .
B ) keep it s actual budget deficit below 3 % of its GDP .
C ) keep it s cyclically balanced budget below 3 % of its GDP .
D ) supply a certain amount of euros each year .
228 .   The new stability pact signed in 2011 by the nations that adopted the euro required each country to :
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229 .   The stability pact signed by many of the countries that adopted the euro limited each member nation 's deficit to 3 % of GDP . This :
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230 .   What can the federal government do to finance a deficit ?
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231 .   What was the main financial problem that the government of Greece faced in 2009 ?
A ) It had a large budget surplus that it needed to invest , but it was unable to find investments that offered a high rate of return .
B ) It had a large budget surplus , but the president vetoed attempts to use the surplus to give tax refunds to the citizens .
C ) It had a large budget deficit , but the parliament refused to raise transfer payments to reduce the deficit .
D ) It had a large budget deficit , but most of its creditors were unwilling to make loans to Greece or charged extremely high interest rates to compensate them for the risk of loss .
Answer:  D )   It had a large budget deficit , but most of its creditors were unwilling to make loans to Greece or charged extremely high interest rates to compensate them for the risk of loss .
232 .   Suppose that U . S . debt is $ 7 trillion at the beginning of the fiscal year . During the fiscal
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233 .   When the government has a deficit , it will most likely finance the deficit by :
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234 .   If government spending increases and taxes decrease :
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235 .   According to the text , the public debt of the U.S. federal government at the end of fiscal year 2013 equaled about :
A ) $ 30 trillion .
B ) $ 12 trillion .
C ) $ 7.4 trillion .
D ) $ 4.8 trillion
236 .   When the budget is in deficit , the government generally :
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237.   Public debt is :
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238 .   Suppose that the budget deficit of a country remains level for five years . The federal debt will :
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239 .   The national debt _____ when the federal government incurs a _____.
A ) falls ; deficit
B ) rises ; surplus
C ) stays the same ; surplus
D ) rises ; deficit
240 .   The national debt :
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241 .   The difference between a budget deficit and government debt is that :
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242 .   In the United States in 2013 , public debt accounted for about _____ of GDP .
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243 .   In Japan during the 1990s _____ policies were put into effect to _____.
A ) contractionary tax ; counter inflation
B ) contractionary spending ; counter inflation
C ) expansionary tax ; counter inflation
D ) expansionary spending ; prop up aggregate demand
244 .   The U.S. national debt as a percentage of GDP is _____ that of Greece .
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Financial Markets and Institutions
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Chapter 5 / Exercise 30
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232.Suppose that U.S. debt is $7 trillion at the beginning of the fiscal year. During the fiscal Page 45
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Financial Markets and Institutions
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Chapter 5 / Exercise 30
Financial Markets and Institutions
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year, its purchases of goods and services and its transfers are $2 trillion, and tax revenues are $1.5 trillion. At the end of the fiscal year, the debt is:
233.When the government has a deficit, it will most likely finance the deficit by:
234.If government spending increases and taxes decrease:
235.According to the text, the public debt of the U.S. federal government at the end of fiscal year 2013 equaled about:A)$30 trillion.B)$12 trillion.C)$7.4 trillion.D)$4.8 trillion
236.When the budget is in deficit, the government generally:
237.Public debt is:
238.Suppose that the budget deficit of a country remains level for five years. The federal debt will:Page 46
239.The national debt _____ when the federal government incurs a _____.A)falls; deficitB)rises; surplusC)stays the same; surplusD)rises; deficit
240.The national debt:
241.The difference between a budget deficit and government debt is that:
242.In the United States in 2013, public debt accounted for about _____ of GDP.

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