17.Refer to the following data. Calculate the budget deficit or surplus for Year 3.

Government spending Tax Revenues GDP

Year 1 $450 $425 $2,000 b

Year 2 500 450 3,000

Year 3 690 650 4,000

18.If the government's budget is balanced, what happens to the size of the Public (National) Debt? (Increases. Decreases, goes to zero, Remains the same)

19.What part of the government is responsible for determining fiscal policy?

20.Suppose the Government decreases taxes by $100 billion. If the marginal propensity to consume (MPC) is 0.90 by what amount would GDP increase? Show work.

21.According to Keynes, why is Government involvement in the marketplace necessary when there is a recession?

22.According to Keynes, what is the primary cause of recession?

23.According to Government refinancing of the National Debt, the Debt never has to be paid back. Briefly explain why.

24.According to the crowding-out effect, Business investment spending decreases when the Government decides to spend more money? Briefly explain why that happens.

25.What was the Federal Government budget deficit for Fiscal Year 2020?