Question 1

The major points of the Conservative views presented in the chapter include five arguments. Which of the following three are included:

Accepted Answer

The three points included in the Conservative views presented in the chapter are:

1) Deficit spending crowds out private investment
2) Government spending is mostly wasteful
3) Increasing deficit spending causes inflation.

Option B includes all three points, while options A and C include only one or two points. Option D presents views that are opposite to those presented in the chapter.

Question 2

The major points of the Conservative views presented in the chapter include five arguments. Which of the following three are included:

Accepted Answer

D

Question 3

When the book refers to a policy of austerity it means:

Accepted Answer

D

Question 4

2012 presidential candidate Mitt Romney was in favor of cutting government spending in every area except:

Accepted Answer

Mitt Romney was in favor of increasing military spending and did not support cuts in this area.

Question 5

In the 2012 presidential election, President Barack Obama was in favor of cutting all spending except

Accepted Answer

During the 2012 presidential election, President Barack Obama advocated for protecting investments in key areas such as training and education programs, research and technology spending, and infrastructure investment (including roads and high-speed rail) from spending cuts.

Question 6

Deficit hawks believe:

Accepted Answer

Deficit hawks believe that financing government spending by borrowing harms the economy, therefore they aim to reduce government spending and lower the deficit. They do not believe that deficits are okay if they are caused by tax cuts, and they generally advocate for fiscal responsibility even during recessions. Option A is not a relevant belief for deficit hawks.

Question 7

The crowding out argument states that

Accepted Answer

The crowding out argument suggests that when the government borrows money, it increases the demand for loanable funds which drives up interest rates. This in turn reduces the amount of funds available for private investment, as businesses and individuals find it more expensive to borrow money. As a result, crowding out leads to a decrease in overall investment and economic growth.

Question 8

Progressives respond to the crowding out analysis by arguing that

Accepted Answer

The statements collectively represent the progressive perspective on deficit spending, particularly during economic downturns. They argue that in a recession, increased deficit spending is necessary and does not necessarily lead to higher interest rates (A), that weak investment is not directly caused by high deficit spending (B), and that any increase in incomes from deficit spending can boost demand and investment, offsetting any potential rise in interest rates (C).

Question 9

Conservatives argue that government spending leads to no net increase in GDP because:

Accepted Answer

Conservatives argue that government spending on useful items reduces the ability of private investors to spend on the same things, leading to no net increase in GDP. This is based on the belief that private investors are more efficient and effective in allocating resources than the government.

Question 10

A conservative member of Congress once famously said that the best thing the federal government can do to help the economy is "stop trying to create jobs."

Accepted Answer

(This member of Congress was speaking to a business group: "Government doesn't create jobs. You do.")

Question 11

Why do conservatives believe government cannot create jobs?

Accepted Answer

Conservatives commonly believe that government cannot create jobs because they prioritize the free market and the private sector as the primary drivers of job creation. They argue that government spending to create jobs may come at the expense of private sector spending, thereby reducing overall economic growth. They also argue that for every government job created, a private sector job that would have done the same thing will not be created, which ultimately limits job creation. Thus, all of the above are reasons why conservatives hold this belief.

Question 12

Progressives argue that what the book calls useful government spending can increase GDP without reducing private investment. An example of useful government spending according to the book is

Accepted Answer

Building highways can increase productivity and help reduce transportation costs, which can lead to economic growth without reducing private investment. The other options (building pyramids, buying military equipment, and fighting wars) do not lead to the same economic benefits and may even be detrimental to the economy.

Question 13

According to the US House of Representatives' budgets in 2011 and 2012 it was essential to cut

Accepted Answer

The answer of According to the US House of Representatives'...

Question 14

In 2011 and 2012, the House of Representatives passed a budget that replaced the Medicare program with

Accepted Answer

The House of Representatives passed a budget in 2011 and 2012 that replaced the Medicare program with a program that appropriates money to help senior citizens purchase private insurance. This option is also known as the premium support model, where the government provides a fixed amount of funding to seniors to buy private insurance plans. It is different from a government-run healthcare system for everyone, which is option A, and from a program that only permits low-income people to get government health insurance, which is option B.

Question 15

In 2011 and 2012, the House of Representatives passed budgets that promised spending reductions of

Accepted Answer

The House of Representatives passed budgets in 2011 and 2012 that promised spending reductions of $5 trillion over a number of years.

Question 16

The 2009 recovery act spent money on what the book calls a number of useful projects. They included:

Accepted Answer

The 2009 recovery act focused on creating jobs and stimulating the economy through investments in healthcare, education, and clean energy. This is reflected in option C, which includes jobs for healthcare workers, teachers, and the production of clean energy. Option A is incorrect because it includes jobs for bartenders in gambling casinos, which is not a useful project for economic recovery. Option B is partially correct as it includes jobs for the production of clean energy, but also includes jobs for military equipment, which is not a key area for economic recovery.

Question 17

The National Debt is different from a private personal debt because

Accepted Answer

All of the above statements are correct. The federal government has the ability to print money to service the debt, much of the debt is owed to U.S. citizens and entities, and the government has the power to tax its citizens to pay off the debt. Private individuals do not have these options available to them.

Question 18

The National Debt of the United States in 2011 was

Accepted Answer

According to historical data, the National Debt of the United States exceeded $15 trillion for the first time in 2011. Therefore, the best choice is C.

Question 19

The National Debt of the United States in 2011 was (approximately) what percent of GDP

Accepted Answer

The answer of The National Debt of the United States...

Question 20

Approximately what percent of the National Debt was owned within the United States government in 2011?

Accepted Answer

According to the Treasury Department, approximately 27% of the National Debt was owned by the United States government in 2011. This includes holdings by Social Security, Medicare, and other government trust funds. The majority of the remaining debt is owned by foreign governments, international organizations, and individual investors.

Quiz 17: Fiscal Policy: Austerians and Deficit Hawks V Stimulus

The major points of the Conservative views presented in the chapter include five arguments. Which of the following three are included:

The major points of the Conservative views presented in the chapter include five arguments. Which of the following three are included:

When the book refers to a policy of austerity it means:

2012 presidential candidate Mitt Romney was in favor of cutting government spending in every area except:

In the 2012 presidential election, President Barack Obama was in favor of cutting all spending except

Deficit hawks believe:

The crowding out argument states that

Progressives respond to the crowding out analysis by arguing that

Conservatives argue that government spending leads to no net increase in GDP because:

A conservative member of Congress once famously said that the best thing the federal government can do to help the economy is "stop trying to create jobs."

Why do conservatives believe government cannot create jobs?

Progressives argue that what the book calls useful government spending can increase GDP without reducing private investment. An example of useful government spending according to the book is

According to the US House of Representatives' budgets in 2011 and 2012 it was essential to cut

In 2011 and 2012, the House of Representatives passed a budget that replaced the Medicare program with

In 2011 and 2012, the House of Representatives passed budgets that promised spending reductions of

The 2009 recovery act spent money on what the book calls a number of useful projects. They included:

The National Debt is different from a private personal debt because

The National Debt of the United States in 2011 was

The National Debt of the United States in 2011 was (approximately) what percent of GDP

Approximately what percent of the National Debt was owned within the United States government in 2011?