The largest budget deficit since World War II.
The highest rate of inflation since the Great Depression.
A higher government debt-to-GDP ratio than at any time in American history.
A deficit that is expected to remain permanently at ten percent or more of GDP.
Interest rates on government bonds are relatively low because:
The debt-to-GDP ratio is almost zero.
U.S. government bonds are considered one of the safest assets in the world.
Many are worried about the U.S. government's defaulting.
Decreases.
Does not change, but debt increases.
Increases.
Does not change and neither does the debt.
Are used to purchase goods and services.
Are a payment for past expenditures.
Do not burden the generations that must make them.
Have fallen continuously since World War II.
Positive private savings.
Trade surpluses.
Continual inflation.
Real economic growth.
Held by U.S financial institutions.
Held by foreigners
Held by some parts of the government itself.
That has been adjusted for the effects of inflation.
Government debt owed to its own citizens.
Government debt owed to individuals in foreign countries.
Government debt owed by one branch of the government to another.
Debt that individuals in foreign countries owe to the U.S. government.
How much interest will have to be paid on the national debt.
How big a national debt a country can handle.
The inflation-adjusted burden of a country's debt.
How much of a country's debt is external rather than internal
Government has fewer sources of income to finance its debt than individuals.
Government can create money to finance its debt.
Government debt can be owed to foreigners, unlike the debt of individuals.
Government debt must be repaid at some point in time.
How much interest will have to be paid on the national debt.
How big a national debt a country can handle.
The inflation-adjusted burden of a country's debt.
How much of a country's debt is external rather than internal.
Deficit in that year must be $20 billion.
Surplus in that year must be $20 billion.
Deficit in that year decreases by $20 billion.
Surplus in that year increases by $20 billion.
Deficit of $100 million per year and a debt of $1 billion.
Surplus of $100 million per year and a debt of $1 billion.
Deficit of $100 million and a debt of $1 billion per year.
Surplus of $100 million and a debt of $1 billion per year.
1 percent.
1 percent.
4 percent.
5 percent.
An increase in taxes.
An increase in government expenditures.
An increase in interest rates.
An increase in the debt.
$13 trillion
$13.5 trillion
$6 trillion
$6.5 trillion
There is no passive deficit or surplus.
There is a passive surplus.
There is a passive deficit.
The passive deficit cannot be determined without more information
Increase the budget deficit by $30.
Increase the budget deficit by $220.
Decrease the budget deficit by $30.
Decrease the budget deficit by $220.
Is zero.
Is between zero and $4 billion.
Is $4 billion.
Cannot be determined from the given information.
At potential income.
Above potential income.
Above potential income.
Experiencing deflation.
Investment.
Government consumption.
Taxes.
Subsidies.
Federal Reserve policy lowers the unemployment rate below the natural rate.
Federal Reserve policy raises the unemployment rate above the natural rate.
Federal Reserve policy targets inflation at its current value.
Federal Reserve policy targets inflation at levels below its current value.
Buy treasury bills
Sell treasury bills
Lower the discount rate
Increase the money supply
Lower taxes
Both workers and firms worse off.
Workers worse off and firms better off.
Workers better off and firms worse off.
Both workers and firms better off.
Horizontal line; 0% inflation
Negatively sloped line; the intersection of aggregate demand and short-run aggregate supply
Vertical line; the natural rate of unemployment
Vertical line; the expected rate of inflation
Helps lenders and borrowers.
Helps lenders but hurts borrowers.
Helps borrowers but hurts lenders.
Hurts lenders and borrowers.
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