Suppose two economies the United States and Saudi Arabia each have a GDP of

Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000.
                            A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling
                            $100 worth of U.S. government bonds to Saudi Arabia. During the war period,

a.U.S. civilian and war consumption stays at $1,000 while Saudi consumption falls to
$900

b.U.S. civilian and war consumption increases to $1,100 while Saudi consumption
stays at $1,000

c.U.S. civilian and war consumption increases to $1,100 while Saudi consumption
falls to $900

d.U.S. civilian and war consumption stays at $1,000 and Saudi consumption stays at
$1,000

e.U.S. civilian and war consumption stays at $1,000 while Saudi consumption rises to
$1,100

142.              Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000.
                            A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling
                            $100 worth of U.S. government bonds to Saudi Arabia. In subsequent years, GDP
                            remains at $1,000 for each country and the United States imposes a $10 tax to make its
                            debt payments to the Saudis. Now while the United States is still debt obligated,

a.U.S. consumption is $1,000 and Saudi consumption is $1,000

b.U.S. consumption is $990 and Saudi consumption is $990

c.U.S. consumption is $1,010 and Saudi consumption is $990

d.U.S. consumption is $1,000 and Saudi consumption is $1,010

e.U.S. consumption is $990 and Saudi consumption is $1,010

143.              The debt burden can be passed on to future generations if public debt is

a.deflationary

b.converted into paper currency

c.turned into private debt

d.an external debt

e.crowded out

144.              The Tax Reforms of 1981 and 1986

a.caused public debt to increase dramatically

b.raised the marginal tax rates

c.increased the number of tax brackets

d.were made principally on excise taxes

e.increased the government’s ability to discriminate with respect to who pays what
taxes

145.              For a time, between 1995 and 2001,

a.tax revenues have decreased

b.budget deficits decreased substantially

c.sustained economic growth has increased both deficits and tax revenues

d.government spending has increased dramatically due to increased defense
expenditures

e.the view in government, academe, and society that government can contribute to
moderate social and economic ills has been persuasive

146.              Which of the following tax systems is the most efficient based on the amount spent to
                            collect $100 in taxes?

a.United Kingdom

b.Japan

c.Canada

d.United States

e.Russia

147.              The tax reforms of the 1980s

a.increased the percent of personal income taxed

b.shifted most the tax burden onto the corporation

c.reduced federal, state and local sales taxes

d.reduced tax brackets and the marginal tax rates within the brackets

e.resulted in reducing government deficits

148.              A key feature of the 2003 tax reform was

a.the creation of an estate tax

b.reduction of the tax rate on dividends and capital gains

c.eliminating the capital gains tax

d.eliminating tax exemptions

e.increasing tax deductions for corporate expenditures on entertainment

149.              One of the reasons that President Bush advocated for the 2003 tax reform was

a.to create a ‘stimulus package’ to counter a deepening of the recessionary phase of
the business cycle

b.to stem the growing rate of inflation

c.to provide the revenues to fight the war on terrorism

d.to curb the outflow of revenue to foreign countries by reducing trade imbalances

e.to reduce the government deficit