True or false (1 point) - Circle or highlight the correct response

1. The national debt and budget deficit are different names for the same thing.

Circle one:TRUEFALSE

2. If government outlays and taxes revenues increase by the same amount, the government's budget balance does not change.

Circle one:TRUEFALSE

3. Social Security and Medicare obligations are less than U.S. GDP.

Circle one:TRUEFALSE

4. For the past decade, the U.S. federal government has had a budget deficit.

Circle one:TRUEFALSE

5. Automatic stabilizers are features of fiscal policy that work to stabilize real GDP without explicit action by the government.

Circle one:TRUEFALSE

6. The cyclical deficit is larger when the economy is in a recession.

Circle one:TRUEFALSE

7. The government expenditure multiplier is the magnification effect that a change in aggregate demand has on government expenditures on goods and services.

Circle one:TRUEFALSE

8. A tax cut is a possible fiscal stimulus designed to increase GDP.

Circle one:TRUEFALSE

9. Estimating potential GDP is a limitation of automatic fiscal policy.

Circle one:TRUEFALSE

10. Income taxes create wedge between the wage rate paid by firms and the wage rate workers take home.

Circle one:TRUEFALSE

11. An income tax hike decreases the supply of labor but has no effect on employment or potential GDP.

Circle one:TRUEFALSE

12. An income tax cut increases potential GDP by shifting the nation's production function upward.

Circle one:TRUEFALSE

13. Taxes on interest income can drive a wedge between the interest rate borrowers pay and the interest rate lenders receive.

Circle one:TRUEFALSE

14. An increase in the budget deficit can raise the real interest rate and crowd out private investment.

Circle one:TRUEFALSE

15. A tax cut increases aggregate demand and decreases aggregate supply.

Circle one:TRUEFALSE