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1. A period of economic expansion is defined as two or more consecutive quarters of GDP
growth. Likewise, a recession is defined as two or more consecutive quarters of negative
growth. Using this convention, the current period of economic expansion is the longest in
U.S. history, and began in:
a. 1982
b. 1992
c. 1993
d. 1996 |
2. In 1993, President Clinton signed a $500 billion tax increase. For the first few
quarters after the increase went into effect, interest rates:
a. fell
b. remained unchanged
c. rose |
3. In 1992, just before the 1993 tax hike, the economy:
a. Was in
recession (negative growth)
b.
Was growing at a sluggish pace (around 2%)
c. Was
growing robustly (greater than 4%) |
4. For the first two years following the 1993 tax hike, the economy:
a. Was in
recession (negative growth)
b.
Was growing at a sluggish pace (around 2%)
c. Was
growing robustly (greater than 4%) |
5. Budget deficits when President Clinton entered office and for his first year were:
a. falling
b. remaining fairly
constant
c. rising |
6. Budget deficits for the three years after the 1993 tax hike:
a. began to fall
b. remained about the
same
c. began to rise |
7. Budget deficits following the 1995 “government shutdown” and subsequent
budget agreements:
a. began to fall
b. remained about the
same
c. began to rise |
8. The 1990-91 recession was called “the worst recession since the 1930’s”
by Al Gore. In fact:
a.
It was the mildest recession in postwar history (GDP fell by less than 1%)
b. It
was the second-mildest recession in postwar history (GDP fell by 1.5%)
c.
It was one of the worst recessions in postwar history (GDP fell by more than 2%) |
9. Economists attribute the economic growth of the 1990’s mainly to:
a. the decline in
inflation
b. the balanced budget
c. expansion of free
trade
d. government
spending stimulus
e. both (a) and (c) |
10. The growth in budget deficits in the 1980's have been attributed to:
a. a rapid decline in inflation, resulting in
higher real spending increases
b. increased defense spending
c. increased non-defense spending
d. fall in government revenues caused by the
1981 tax cut
e. (a), (b), and (c) |
11. The growth in budget deficits during the 1980’s has resulted in:
a. higher inflation
b. higher interest
rates
c. both (a) and (b)
d. none of the above |
12. The current budget surplus is a result of:
a. cuts in the
non-defense budget
b. cuts in the
defense budget
c. tax rate increases
d. falling interest
rates
e. rising tax revenues
f. both (b) and (e) |
