Test Your Knowledge!

When a government spends more during a fiscal year than it receives in income from taxes and other receipts, we have a ___________, whereas if it has more revenue than it spends, we experience a _____________.

Which of the following is correct?
The United States and most other industrialized countries :

Let’s say that a country’s national debt is $0 in year 1. In year 2 the country runs a surplus of $200. In year 3 it experiences a deficit of $300. In year 4 it balances its budget, and in year 5 it runs a deficit of $600. What is this country’s national debt at the end of year 5?

Which of the following is correct?
In most countries around the world:

Public debt:

According to the “public debt as a percentage of Gross Domestic Product” table in section 3 of this Unit, which of the following is the correct ranking, beginning with the country that has the lowest public debt as a percentage of GDP ratio and ending with the country that has the highest ratio?

Most developed countries’ governments around the world finance the majority of their budget deficits by:

The difference between government bonds, notes, and bills is:

John Maynard Keynes supported ________________, whereas most classical economists supported ___________.

The following are adverse consequences of rising deficits and debts, except: