Question 1

The portion of US debt owned by the public (non-Federal Reserve)

Accepted Answer

The portion of US debt owned by the public dropped from the 1940s through the 1970s, spiked in the 1980s, dropped in the 1990s and early 2000s, and rose in the 2010s. This is due to various economic and political factors such as wars, recessions, government spending, and tax policies.

Question 2

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

Accepted Answer

A Balanced Budget Amendment would require the government to balance spending with revenue, which means that during an economic slowdown when revenue decreases, the government would be forced to cut spending, potentially exacerbating the economic downturn. The government would not be able to use deficit spending to stimulate the economy, which could make the bad times even worse.

Question 3

The portion of US debt owned by the Federal Reserve

Accepted Answer

The portion of US debt owned by the Federal Reserve rose from around 6% to around 12% as a result of the Great Recession.

Question 4

Suppose an economist is analyzing the impact of a budget deficit used to finance a significant infrastructure project that will pay significant dividends in the coming years. That economist will focus on

Accepted Answer

The economist should focus on both the ratio of the deficit to GDP, as this will give an indication of the burden on the economy, and whether the infrastructure project will produce enough gains in the future to justify the borrowing. Neglecting either of these factors could lead to incomplete or inaccurate analysis.

Question 5

The amount of US debt owned by the Chinese

Accepted Answer

The amount of US debt owned by China continues to rise, as China remains one of the largest foreign holders of US debt.

Question 6

The portion of US debt owned by various government trust funds

Accepted Answer

Government trust funds, such as Social Security and Medicare, own a portion of the US debt. This portion peaked in 2010 but dropped significantly from 2010 to 2015. This is because during that time, the Social Security trust fund was not spending as much as it was taking in, resulting in a surplus that allowed it to buy fewer Treasury bonds. However, since 2015, the portion owned by government trust funds has been gradually increasing again.

Question 7

The amount of US debt owned by the Japanese

Accepted Answer

The answer of The amount of US debt owned by...

Question 8

The portion of US debt owned by various government trust funds

Accepted Answer

The portion of US debt owned by various government trust funds peaked in the 2010s, reflecting a period where such holdings reached their highest levels before beginning to fluctuate due to various economic and policy changes.

Question 9

If a Balanced Budget Amendment to the U.S. Constitution were passed, during economic prosperity, such an amendment would

Accepted Answer

The answer of If a Balanced Budget Amendment to the...

Question 10

If a Balanced Budget Amendment to the U.S. Constitution would be "pro-cyclical," an economist would consider that to be ____ economic stability.

Accepted Answer

"Pro-cyclical" means that the Balanced Budget Amendment would exacerbate economic fluctuations and make them worse. This would be counterproductive to achieving economic stability.

Question 11

Suppose an economist is analyzing the impact of a debt and its ability to be paid. That economist will focus on

Accepted Answer

The economist would need to focus on both the ratio of the debt to GDP and the interest payments as a percentage of GDP. This is because simply looking at the debt alone would not give a full picture of the ability to pay it back. The inflation-adjusted amount of debt would also not be sufficient since it does not provide information on the current state of the economy. By analyzing the ratio of debt to GDP, the economist can see how much debt the country has relative to its ability to produce goods and services. Additionally, by examining the interest payments as a percentage of GDP, the economist can determine how much of the country's resources are being devoted to paying off the interest on the debt. This information is crucial in determining the sustainability of the debt and its impact on the economy.

Question 12

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

Accepted Answer

A Balanced Budget Amendment would require the government to not spend more than it earns in revenue. During an economic slowdown, this could prevent the government from implementing fiscal stimulus measures (such as increased spending or tax cuts) that are often used to counteract a recession. This restriction could force policymakers into maintaining or increasing taxes and reducing government spending to balance the budget, which could exacerbate economic downturns, making it a counterproductive policy in such contexts.

Question 13

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

Accepted Answer

A Balanced Budget Amendment would mandate that the federal budget is balanced each year, meaning that the government cannot run a deficit. During an economic slowdown, tax revenues decrease and government spending may increase (e.g. through increased spending on social welfare programs). Therefore, in order to balance the budget, the government would need to either increase taxes, decrease spending, or do some combination of the two. This could potentially worsen the economic slowdown, as a tax increase or spending cut may reduce the amount of money circulating in the economy.

Question 14

Compared to the U.K. and Germany the debt as a percentage of GDP in the US is

Accepted Answer

According to data from the World Bank, as of 2019, the debt as a percentage of GDP in the US was approximately 107%, while in the UK it was around 85% and in Germany it was roughly 60%. Therefore, the US debt as a percentage of GDP is somewhat greater compared to the UK and substantially greater compared to Germany.

Question 15

When analyzing the impact of a budget deficit, an economist will focus on

Accepted Answer

When analyzing the impact of a budget deficit, an economist should consider the ratio of the deficit to GDP, as this gives an idea of the overall impact on the economy, which includes the borrowing but also includes the economic output of the country. Additionally, the economist should consider whether the borrowed money is being used for investments, which can have long-term positive effects on the economy.

Question 16

The amount of US debt owned by the English

Accepted Answer

The amount of US debt owned by the UK has remained relatively low and constant compared to other major holders like China and Japan.

Quiz 12: Federal Deficits, Surpluses, and the National Debt

The portion of US debt owned by the public (non-Federal Reserve)

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

The portion of US debt owned by the Federal Reserve

Suppose an economist is analyzing the impact of a budget deficit used to finance a significant infrastructure project that will pay significant dividends in the coming years. That economist will focus on

The amount of US debt owned by the Chinese

The portion of US debt owned by various government trust funds

The amount of US debt owned by the Japanese

The portion of US debt owned by various government trust funds

If a Balanced Budget Amendment to the U.S. Constitution were passed, during economic prosperity, such an amendment would

If a Balanced Budget Amendment to the U.S. Constitution would be "pro-cyclical," an economist would consider that to be ____ economic stability.

Suppose an economist is analyzing the impact of a debt and its ability to be paid. That economist will focus on

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

If a Balanced Budget Amendment to the U.S. Constitution were passed, during an economic slowdown, such an amendment would

Compared to the U.K. and Germany the debt as a percentage of GDP in the US is

When analyzing the impact of a budget deficit, an economist will focus on

The amount of US debt owned by the English