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AP Macroeconomics 5.4 Government Deficits and the National Debt Questions

Relate annual government budget balances to accumulated national debt, using taxes, purchases, and transfers to analyse fiscal changes.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • calculate the government budget balance from tax receipts, purchases, and transfer payments
  • separate the current-year budget deficit from the stock of outstanding national debt
  • trace deficits, balanced budgets, and surpluses into increases, no change, or decreases in debt
  • identify fiscal-policy changes that narrow a deficit or reduce accumulated debt

Covered syllabus points

POL-3.B—a. Define the government budget surplus (deficit) and national debt. b. Explain the issues involved with the burden of the…

Question 1

[Maximum number: 1]

The economy of Country Zeta is in long-run equilibrium; however, the government is concerned about the size of the national debt.

Identify one specific fiscal policy action the government could take to reduce the national debt.

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