231.What was the main financial problem that the government of

Question : 231.What was the main financial problem that the government of : 2032671

231.What was the main financial problem that the government of Greece faced in 2009?

A)It had a large budget surplus that it needed to invest, but it was unable to find investments that offered a high rate of return.

B)It had a large budget surplus, but the president vetoed attempts to use the surplus to give tax refunds to the citizens.

C)It had a large budget deficit, but the parliament refused to raise transfer payments to reduce the deficit.

D)It had a large budget deficit, but most of its creditors were unwilling to make loans to Greece or charged extremely high interest rates to compensate them for the risk of loss.

232.Suppose that U.S. debt is $7 trillion at the beginning of the fiscal year. During the fiscal year, its purchases of goods and services and its transfers are $2 trillion, and tax revenues are $1.5 trillion. At the end of the fiscal year, the debt is:

A)$10.5 trillion.

B)$6.5 trillion.

C)$9 trillion.

D)$7.5 trillion.

233.When the government has a deficit, it will most likely finance the deficit by:

A)cutting the salaries of the president and Congress.

B)selling some military bases.

C)borrowing the money.

D)charging higher admission fees at national parks.

234.If government spending increases and taxes decrease:

A)implicit liabilities will increase.

B)implicit liabilities will decrease.

C)the public debt will increase.

D)the public debt will decrease.

235.According to the text, the public debt of the U.S. federal government at the end of fiscal year 2013 equaled about:

A)$30 trillion.

B)$12 trillion.

C)$7.4 trillion.

D)$4.8 trillion

236.When the budget is in deficit, the government generally:

A)raises taxes.

B)increases the public debt.

C)sells public assets like national parks.

D)decreases military spending.

237.Public debt is:

A)taxes minus government purchases minus government transfers.

B)government debt held by foreigners.

C)government debt held by individuals and institutions outside the government.

D)the government deficit divided by GDP.

238.Suppose that the budget deficit of a country remains level for five years. The federal debt will:

A)remain constant.



D)either remain constant or fall.

239.The national debt _____ when the federal government incurs a _____.

A)falls; deficit

B)rises; surplus

C)stays the same; surplus

D)rises; deficit

240.The national debt:

A)is the sum of all past federal surpluses.

B)grows when the government runs a deficit.

C)grows when the government runs a surplus.

D)did not exist until 1998.

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