ECO203 Week 3 Quiz

Question 1

If you remove the Social Security Trust Fund from the federal budget,

the deficit is smaller.

Correct!

the deficit is larger.

for some recent years the deficit is smaller, and for others it is larger.

the deficit will not change.

the effect on the deficit cannot be determined.

Question 2

The cumulative total of past federal budget deficits minus past surpluses

Correct!

is known as the national debt.

is about one trillion dollars.

adds up to zero.

is not important because it can never be a burden on future generations.

is no longer statistically calculated.

Question 3

The Ford tax rebate was an example of

Correct!

expansionary fiscal policy.

an automatic stabilizer.

a supply side policy.

a contractionary fiscal policy.

Question 4

In a macroeconomic equilibrium,

planned saving and planned investment are equal, and the size of the income stream is constant.

the size of the income flow is constant.

Correct!

planned saving is equal to either planned investment or actual investment.

planned saving and planned investment are equal.

Question 5

Which of the following is the largest source of funds for the federal government?

property taxes

borrowing

excise taxes

Correct!

income taxes

tariffs

Question 6

A laissez-faire attitude toward most markets is most closely associated with

Keynesians.

monetarists.

Correct!

classical economists.

supply siders.

Reaganomics.

Question 7

All but which one of the following are transfer payments?

Correct!

the President’s salary

welfare

Social Security payments

farm subsidies

food stamps

Question 8

The White House sees a recession on the horizon, but Congress is preoccupied with other issues and is slow to act. This delay is an example of

Correct!

an implementation lag.

an impact lag.

a communication gap.

a recognition lag.

a time lag.

Question 9

Classical economists believed that the level of real output is determined by the

Correct!

labor market equilibrium.

price level.

interest rate.

government.

Question 10

The length of time it takes to realize that there is an economic problem is called

Correct!

the recognition lag.

the implementation lag.

the impact lag.

the policy lag.

the legislative lag.