Question : 21) Suppose the stock of government debt in Canada at : 1384503

 

21) Suppose the stock of government debt in Canada at the end of one fiscal year is $475 billion. If the stock of debt rises to $482 billion by the end of the next fiscal year, then we know that in that year

A) debt-service payments rose by $7 billion.

B) the government had a primary budget surplus of $7 billion.

C) the government had an annual budget deficit of $7 billion.

D) the government had a primary budget deficit of $7 billion.

E) tax revenues decreased by $7 billion.

22) Suppose the stock of government debt in Canada at the end of one fiscal year (Year 1) is $475 billion. During the following year (Year 2), government purchases were $180 billion, debt-service payments were $25 billion, and net tax revenues were $208 billion. What is the stock of debt at the end of Year 2?

A) $422 billion

B) $457 billion

C) $472 billion

D) $475 billion

E) $478 billion

23) Suppose during one fiscal year, government purchases are $195 billion, debt-service payments are $22 billion and net tax revenues are $208 billion. What is the annual budget deficit/surplus?

A) budget surplus of $22 billion

B) budget deficit of $13 billion

C) budget surplus of $13 billion

D) budget deficit of $9 billion

E) budget surplus of $9 billion

24) Suppose during one fiscal year, government purchases are $195 billion, debt-service payments are $22 billion and net tax revenues are $208 billion. What is the government’s primary budget deficit/surplus?

A) primary budget surplus of $22 billion

B) primary budget deficit of $13 billion

C) primary budget surplus of $13 billion

D) primary budget deficit of $9 billion

E) primary budget surplus of $9 billion

25) If the government’s tax revenues are less than its total spending (including debt-service payments), then we know

1) the government has an annual budget deficit;

2) the government has a primary budget deficit;

3) the stock of government debt is increasing.

A) 1 only

B) 2 only

C) 3 only

D) 1 and 2

E) 1 and 3

26) If the government’s total budget deficit is $24 billion and its debt-service payments are $20 billion, then its ________ is $4 billion.

A) cyclically adjusted deficit

B) primary budget deficit

C) primary budget surplus

D) government expenditure

E) total tax revenue

27) If the government’s total budget surplus is $10 billion and its debt-service payments are $8 billion, then its primary budget surplus is

A) $2 billion.

B) $8 billion.

C) $10 billion.

D) $18 billion.

E) -$2 billion.

28) Consider the federal government’s budget constraint. Suppose total government expenditure (government purchases, G, plus debt-service payments, i × D) is $500 billion and net tax revenues, T, is $481 billion. In this case,

A) the annual budget surplus is $19 billion and the debt can be reduced by this amount.

B) the primary budget surplus is $19 billion and the debt can be reduced by this amount.

C) it is not possible to determine the deficit or surplus situation of the government because we do not know the value of the debt-service payments.

D) the primary budget deficit is $19 billion and the government must borrow this amount.

E) the annual budget deficit is $19 billion and the government must borrow this amount.

29) The stock of government debt will continue to rise unless the government

A) increases its taxes.

B) decreases its expenditures.

C) decreases the size of its transfers.

D) runs a budget surplus.

E) runs a budget deficit.

30) The government’s current spending and taxation policies cannot affect the

A) primary budget deficit.

B) annual budget deficit.

C) the size of its transfers.

D) change in the stock of government debt.

E) the existing stock of government debt.

 

 

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