Chapter 13 - Deficit Spending and the Public Debt

Question 1

What is government budget deficit?

Answer 1

An exuberance of government disbursement over government proceeds during a given duration of time.

Question 2

What is balanced budget?

Answer 2

Government’s disbursement is accurately equal to the entire taxes and other proceeds it gathers during a given duration of time.

Question 3

Is the national budget deficit a flow or a stock?

Answer 3

A flow.

Question 4

What is government budget surplus?

Answer 4

An exuberance of government proceeds over government disbursement during a given duration of time.

Question 5

Is public debt a stock or flow?

Answer 5

A stock.

Question 6

What is public debt?

Answer 6

The entire worth of every outstanding national government securities.

Question 7

Is the country debt a stock or a flow?

Answer 7

A stock.

Question 8

What happened from 1997 to 2007?

Answer 8

The government witnessed budget exuberance.

Question 9

What is the Annual Deficit Formula?

Answer 9

Government spending - Taxes collected

Question 10

What is the deficit formula?

Answer 10

Federal Budget Spending - Federal Budget Receipts

Question 11

What is the formula for Deficit as a % of GDP?

Answer 11

Deficit / GDP x 100

Question 12

What is the gross public debt?

Answer 12

Every national government’s liabilities, heedless of who possesses it.

Question 13

What is the net public debt?

Answer 13

Gross public debt - Financial assets held by the government

The gross national debt grows whenever the national government encounters a budget loss.

Question 14

How can we decrease national budgets?

Answer 14

Grow taxes.

Question 15

What is exchange deficit?

Answer 15

Canadian buy in eclipses the worth of its ship.

Question 16

What happens when alien dollar holders buy new Canadian regime bonds?

Answer 16

They will have less dollars to disburse on Canadian elements, involving Canadian ship merchandise.

Question 17

T/F Is it true alien dollar holders will want to buy more things with a bigger interest rate?

Answer 17

True.

Question 18

What can happen if the frugality is below entire employment?

Answer 18

The regime deficit can shut - the recessionary gap.

Question 19

What can happen if the frugality is above entire employment?

Answer 19

The regime deficit can build - the inflationary gap.

Question 20

What happens when the regime disburses more than it gathers in taxes?

Answer 20

The regime takes up a bigger section of industrial enterprise.

Question 21

Is there a association among the Canadian trade deficit and the national budget deficit?

Answer 21

Bigger trade deficits tend to follow bigger regime budget deficits.

Question 22

What happens when there is a bigger interest rate?

Answer 22

Prices go down.

Question 23

What happens when there is a lower interest rate?

Answer 23

Prices go up.

Question 24

How can the regime decrease all its red ink?

Answer 24

• Grow taxes for everybody.
• Tax the wealthy.
• Decrease expenditures.
• Crucial Transfers to other positions of regime assistance to feed deficit disbursement.

Question 25

What are the crucial transfers to other positions of regime?

Answer 25

- National government payments created to other positions of regime for health care, post secondary schooling, social help, and financial grant through the National-Provincial Financial Arrangements Act.

Question 26

What is another way to reduce national budget deficits?

Answer 26

Reduce government disbursement. (Transmissions to individuals), rewards ensured under government events - Old Age Security and Employment Insurance.

Question 27

Who will gain rewards in the long duration from bigger budget deficits?

Answer 27

People who collect the bigger contribution of the yearly flow of real GDP to regime-supplied merchandise and services: people that the merchandise and services are redelivered.