Jeremy Asked: Economy help? Will pay you if the answers are all right.?

The debt service of the U.S. government suggests that over the past 50 years the debt has become:
A. more of a problem than the debt to GDP ratio would suggest, but less of a problem than the simple debt would suggest.
B. more of a problem than the simple debt would suggest, but less of a problem than the debt to GDP ratio would suggest.
C. more of a problem than either the debt to GDP ratio or the simple debt would suggest.
D. less of a problem than either the debt to GDP ratio or the simple debt would suggest.

As the interest rate rises, debt service:
A. decreases.
B. does not change, but debt increases.
C. increases.
D. does not change and neither does the debt.

According to the Ricardian equivalence theorem, people increase savings today when the government increases deficits because they recognize that:
A. government deficits imply higher future taxes.
B. government deficits imply lower future taxes.
C. consumption reduces future taxes.
D. consumption increases future taxes.

Economists who believe in sound finance would say that in a recession, the government should:
A. run a budget deficit because the Ricardian equivalence theorem is true both in theory and in practice.
B. run a budget deficit despite the truth of the Ricardian equivalence theorem.
C. maintain a balanced budget because the Ricardian equivalence theorem is true in practice.
D. maintain a balanced budget for political and moral reasons.

The crowding out effect:
A. increases the multiplier effect, so that an increase in taxes reduces income by more.
B. increases the multiplier effect, so that an increase in taxes reduces income by less.
C. decreases the multiplier effect, so that an increase in taxes reduces income by more.
D. decreases the multiplier effect, so that an increase in taxes reduces income by less

Fiscal policy is typically:
A. extremely flexible because most government spending is discretionary.
B. extremely flexible provided policy lags are short.
C. extremely flexible despite the presence of implementation problems.
D. difficult to implement quickly.