The national debt

a. is the sum of all past federal deficits plus any surpluses.

b. grows when the government runs a deficit.

c. grows when government spending increases.

d. is a major problem facing the U.S. government.

Das Kapital was written by:

a. Thomas Malthus.

b. Karl Marx.

c. Adam Smith.

d. David Ricardo.

The history of socialism dates back to:

a. Vladimir Lenin, in the early 1900s.

b. Karl Marx, in the mid-1800s.

c. Robert Owen, in the 1600s.

d. biblical times.

Taxes assessed on firms and employees on wages and salaries earned are called

a. dividend taxes.

b. payroll taxes.

c. corporate profits taxes.

d. earned income taxes.

Generational accounting

a. is a method of assessing the impact of fiscal policy lags from one generation to another.

b. measures the number of generations it takes to pay off the national debt at a given point in time.

c. evaluates the impact of current fiscal policies on different generations in the economy, including future generations.

d. is an accounting method that defers to the future, the cost of any government policy the rewards of which will be reaped in the future.

According to Marxian theory, if the production of commodity X requires 20 percent more labor time than the production of commodity Y, then the value of commodity X will be:

a. about equal to the value of commodity Y.

b. exactly 20 percent more than the value of commodity Y.

c. exactly 20 percent less than the value of commodity Y.

d. over 20 percent more than the value of commodity Y.

Personal income taxes and transfer payments

a. acts as automatic stabilizers.

b. magnify fluctuations in GDP.

c. are discretionary fiscal policy tools only.

d. are influenced by monetary policy.

Socialism in Yugoslavia was characterized by:

a. public ownership of factories with five or more employees.

b. low living standards compared to the Soviet Union.

c. less equal income distributions than market capitalist economies.

d. low unemployment rates.

Adam Smith argued in the Wealth of Nations that the relative values of different goods was determined by:

a. demand and supply.

b. the invisible hand.

c. the relative amounts of labor used in their production.

d. the relative amounts of profit.

During a recession, unemployment insurance ensures that

a. firms layoff fewer of its employees than it would if there is no unemployment insurance.

b. disposable income increases as GDP falls.

c. disposable income does not fall by as much as GDP decreases.

d. the marginal propensity to consume increases.