专业课资料 练习题 真题 曼昆宏观课后练习答案英文版 英文版答案 Mnkiw 5e Chpter 15

Mankiw 5e Chapter 15 Government debt is an example of a A. stock.B. flow.C. index.D. capital account.1 out of 1Correct. The answer is A. Government debt measures the level of funds owed by the government at a given point in time; therefore, it is a stock. See Sections 2.1 and 15.1. The budget deficit is an example of a A. stock.B. flow.C. index.D. capital account.0 out of 1Incorrect. The correct answer is B. The budget deficit measures the difference between how much the government spends versus how much it takes in taxes PER YEAR; therefore, it is a flow. See sections 2.1 and 15.1. In 2001, the debt of the U.S. Federal Government was between A. $1-$2 trillion.B. $3-$4 trillion.C. $5-$6 trillion.D. $7-$8 trillion.1 out of 1Correct. The answer is B. In 2001, the debt of the U.S. Federal Government was $3.2 trillion. See section 15.1. Compared to other industrialized countries, the U.S. government debt at the end of the 20th century was A. extremely large.B. slightly above average.C. about average.D. very small.0 out of 1Incorrect. The correct answer is C. Compared to 19 other major economies, the U.S. was in the middle of the pack in terms of the size of its government debt. See Section 15.1. The growth rate of the ratio of government debt to GDP in the 1980s was A. the largest ever recorded.B. the largest ever recorded in peacetime.C. larger than other periods, but not out of the ordinary.D. comparable to other peacetime periods.1 out of 1Correct. The answer is B. As discussed in Section 15.1, the growth rate of government debt relative to GDP in the 1980s was the highest ever experienced in the U.S. during peacetime. Suppose that the government debt at the beginning of a certain year is 1,000, the nominal deficit during that year is 200, and inflation is 5 percent. The real deficit then is A. 100.B. 200.C. 50.D. 150.1 out of 1Correct. The answer is D. The nominal deficit overstates the true deficit by the rate of inflation multiplied by the stock of government debt. In this case the real deficit is 200 - (0.05 x 1,000) which is equal to 150. See Section 15-2. Consider the following abridged table of a governments finances Year 1994 19951996Government purchases300200Government investment200300Debt (January 1) 1,0001,2501,500Government assets (January 1): 7509501,250Using the capital budgeting method, what would the government budget balance have been in 1994 and 1995, respectively? A. 50 deficit and 50 surplusB. 50 surplus and 50 deficitC. 200 surplus and 300 surplusD. 300 deficit and 200 deficit1 out of 1Correct. The answer is A. Using capital budgeting, the deficit is calculated as the change in debt minus the change in assets. This means that there was a deficit of 50 in 1994 and a surplus of 50 in 1995. See Section 15-2. Under the current system of budget deficit accounting, an increase in the future pensions of government workers would A. raise the current deficit.B. lower the current deficit.C. not affect the current deficit.D. raise or lower the current deficit depending on the size of the increase.1 out of 1Correct. The answer is C. The future pensions of government workers are excluded from the current deficit. Thus, an increase in pensions does not affect the deficit. See Section 15-2. Many economists believe that the cyclically adjusted budget deficit is a better measure than the deficit that is usually reported because the cyclically adjusted budget deficit A. provides a more accurate measure of government revenue and spending.B. does not include the natural rate of output and unemployment.C. includes changes in the business cycle.D. gives a better idea of fiscal policy stance.0 out of 1Incorrect. The correct answer is D. The government budget deficit can change for basically two reasons: changes in government policy and fluctuations in the economy. A cyclically adjusted budget deficit indicates what the deficit would be if the economy were at its natural rate, and hence, gives a better idea of fiscal policy stance. See Section 15-2. Consumers are thought to be forward-looking. This implies that current consumption depends on A. current as well as future income.B. future income alone.C. future inflation.D. future consumption.1 out of 1Correct. The answer is A. Forward-looking consumers will make consumption plans based on their permanent income. Permanent income is the discounted sum of current and future income. Thus, current consumption depends on both current and future income. See Section 15-4. Suppose the government cuts taxes without cutting expenditure, so that it runs a budget deficit. It finances the deficit by borrowing. Consumer Jill receives a $1,000 dollar tax cut and uses the money to buy a $1,000 government bond. She is a firm believer in Ricardian equivalence. What is the effect on her net wealth and on her consumption behavior? A. Her net wealth increases, but her consumption remains constant.B. Her net wealth increases, but her consumption increases by less than the increase in her net wealth.C. Her net wealth and consumption both remain constant.D. Her net wealth remains constant, but her consumption increases.1 out of 1Correct. The answer is C. Jill knows that when her bond comes due, the government will have to raise her taxes by $1,000 to pay for it. Therefore, the bond does not make Jill wealthier and she will not change her consumption. See Section 15-4. Far over the seas, there is a country called Hypothetica, in which Ricardian equivalence reigns supreme. Suppose the Hypothetican government raises taxes to redeem some of the government debt outstanding. What happens to public saving and national saving? A. Public saving rises, but national saving remains constant.B. Both public and national saving remain constant.C. Public saving rises and national saving falls.D. Public saving falls, but national saving remains constant.0 out of 1Incorrect. The correct answer is A. With no change in government spending, public saving goes up by the full amount of the tax increase. Since consumption will remain constant while disposable income falls, private saving will fall by the same amount that public saving rises. See Section 15-4. Ricardian equivalence does not imply that fiscal policy is irrelevant. A policy action by the government that will ALWAYS affect consumer behavior, regardless of what happens to other variables, is an increase in A. current taxes.B. future taxes.C. government debt.D. government purchases.1 out of 1Correct. The answer is D. Changes in government purchases will affect consumer behavior. See Section 15-4. If Ricardian equivalence holds and the government cuts taxes without any plans to reduce government spending, then a forward-looking consumer would A. increase consumption by the same amount as the tax cut.B. increase consumption by the tax cut times the marginal propensity to consume.C. leave consumption unchanged in order to save for future taxes.D. decrease consumption in order to save for future taxes.1 out of 1Correct. The answer is C. See Section 15-4 for a discussion of the implications of Ricardian equivalence. Suppose a consumer looks only at his current disposable income to make his consumption decisions because he is too lazy to look further into the future. This is an example of A. myopia.B. borrowing constraints.C. Ricardian equivalence.D. the importance of future generations.1 out of 1Correct. The answer is A. Consumers who are not forward-looking are myopic. See Section 15-4. The model of consumption behavior that underlies the Ricardian view of government debt is the A. life-cycle/permanent-income model.B. Keynesian cross.C. cash-flow model.D. credit-rationing model.1 out of 1Correct. The answer is A. See Section 15-4 for an explanation of the Ricardian view of government debt. Under Ricardian equivalence, a tax cut today will raise consumption if A. taxes are raised in the future.B. government spending is reduced.C. government spending is increased.D. consumers are forward-looking.1 out of 1Correct. The answer is B. If government spending is reduced, people expect that taxes will not be raised in the future. See Section 15-4. Suppose consumers expect that future tax rates will be the same as current tax rates. This is an example of A. rational expectations.B. myopia.C. tax smoothing.D. intertemporal substitution.0 out of 1Incorrect. The correct answer is B. Consumers are short-sighted in this example; they fail to take account of future changes in taxes implied by current government policies. See Section 15-4. Choose the pair of phrases that best completes this sentence: If Ricardian equivalence holds and the government cuts taxes without reducing government spending, consumption will _ because people will _ higher future taxes. A. rise; expectB. rise; not expectC. not rise; expectD. not rise; not expect1 out of 1Correct. The answer is C. In the absence of default, the government must raise taxes in the future. If consumers are forward-looking, as they are under Ricardian equivalence, they will not increase consumption because they expect higher future taxes. See Section 15-4. Suppose that Congress creates a budget deficit by cutting taxes. Furthermore, it plans to pay off the deficit by raising taxes in the future. According to the Ricardian view of government debt, the tax cut would NOT affect current consumption plans because the A. tax cut does not affect temporary income.B. tax cut does not affect permanent income.C. marginal propensity to consume out of temporary income is equal to 1.D. marginal propensity to consume out of permanent income is equal to 0.1 out of 1Correct. The answer is B. Consumers make consumption plans based on their permanent income. Since Congress is reducing taxes today, but will be raising them by an equal amount in the future, the policy does not change permanent income and therefore does not change consumption. See Section 15-4. If consumers face borrowing constraints, then A. tax policy will not affect the level of national savings.B. Ricardian equivalence will hold.C. a debt-financed tax cut will stimulate consumption.D. current consumption will be determined entirely by permanent income.1 out of 1Correct. The answer is C. If consumers face borrowing constraints, they may be prevented from consuming at their current optimal level. Tax cuts are then effectively loans from the government. Thus, even forward-looking individuals may raise their consumption in response to a debt-financed tax cut. See Section 15-4. All of the following statements, if true, could be used as arguments against the Ricardian view of government debt, EXCEPT A. consumers always act on the assumption that future taxes will be the same as current taxes.B. many consumers would like to borrow to finance present consumption, but they are constrained from doing so.C. most consumers do not leave bequests to their children.D. all consumers care about future generations as much as they care about themselves.0 out of 1Incorrect. The correct answer is D. If all consumers care about future generations as much as they care about themselves, then Ricardian equivalence will hold. See Section 15-4. Suppose that Davids income follows the following pattern (the figures for 1996 and beyond are expected values) 1995: $30,000 1996: $10,000 1997-end of life: $20,000 Suppose that David is forward-looking and borrowing-constrained. How much will he consume in 1995 and 1996, respectively? A. $30,000 in 1995 and $10,000 in 1996B. $20,000 in 1995 and $10,000 in 1996C. $30,000 in 1995 and $20,000 in 1996D. $20,000 in both 1995 and 19961 out of 1Correct. The answer is D. Davids optimal consumption is $20,000 per year. Since he will not need to borrow to obtain this level, the borrowing constraints have no effect on the pattern of his consumption. See Section 15-4 for a discussion of borrowing constraints. Suppose that Ruths income follows the following pattern (the figures for 1996 and beyond are expected values) 1995: $10,000 1996: $30,000 1997-end of life: $20,000 Suppose that Ruth is forward-looking and borrowing-constrained. How much will she consume in 1995 and 1996, respectively? A. $10,000 in 1995 and $30,000 in 1996B. $10,000 in 1995 and between $20 000 and $30 000 in 1996C. $20,000 in 1995 and $30,000 in 1996D. $20,000 in both 1995 and 19961 out of 1Correct. The answer is B. If she were not borrowing-constrained, Ruth would consume $20,000 per year. But since she cannot borrow, she will consume only $10,000 in 1995. Starting in 1996, she will smooth her consumption. She will spread out the extra $10,000 earned in 1996 over the rest of her life, and thus will consume somewhere between $20,000 and $30,000 per year. See Section 15-4 for a discussion of borrowing constraints. Suppose that Jills income follows the following pattern (the figures for 1996 and beyond are expected values) 1995: $30,000 1996: $10,000 1997-end of life: $40,000 Suppose that Jill is forward-looking and borrowing-constrained. How much will she consume in 1995 and 1996, respectively? A. $30,000 in 1995 and $10,000 in 1996B. $20,000 in 1995 and $20,000 in 1996C. between $20,000 and $30,000 in both 1995 and 1996D. more than $30,000 in both 1995 and 19961 out of 1Correct. The answer is B. Since Jill is borrowing-constrained, she cannot use her income in 1997 and beyond to increase consumption in 1995 and 1996. But she can save her 1995 income to consume in 1996. So she will consume $20,000 in each of these two years, then consume $40,000 per year afterward. See 15-4 for a discussion of borrowing constraints. The existence of bequests may be a point in favor of the Ricardian view if they are left A. for altruistic reasons.B. for strategic reasons.C. for disciplinary reasons.D. accidentally.0 out of 1Incorrect. The correct answer is A. Bequests that are left for altruistic reasons lend credit to the Ricardian view because they show that individuals care about their children. See Section 15-4. A government which has a very large debt specified in nominal terms may be tempted to expand the money supply and create inflation because A. inflation will reduce the real value of the debt.B. the IS curve will shift outward.C. a monetary expansion will raise unemployment.D. then investors will buy more government bonds.1 out of 1Correct. The answer is A. As explained in Section 15.5, inflati