WorksheetsDeficits & Debt Quiz
Total questions: 10
Worksheet time: 5mins
What is a budget deficit?
When taxes are higher than spending
When the government spends more than it collects in taxes
When GDP goes down
When interest rates rise
What is the national debt?
The taxes paid by citizens
A single year of government spending
The sum of all yearly deficits added together
The amount the U.S. owes to states
Why do economists compare debt as a percent of GDP?
Because it’s easier to remember
To see how much money kids owe
To see how debt compares to income
Because GDP never changes
Which two areas make up about half of U.S. government spending?
Military and education
Social Security and healthcare
Food stamps and the post office
Prisons and foreign aid
What is one problem with growing government debt?
It increases school budgets
It increases tourism
It can crowd out private borrowing
It helps small businesses
What does “crowding out” mean in economics?
Running out of space in cities
Government debt leaving less money for businesses to borrow
Overpopulation in markets
People leaving stores in crowds
What can happen if lenders stop trusting the government to repay its debt?
Taxes go down
Interest rates go down
Default and financial crisis
The national debt disappears
What does the debt ceiling do?
Lowers taxes
Sets a cap on how much the U.S. can borrow
Pays off the debt
Controls government salaries
Why are U.S. interest rates on government loans so low?
No one wants to lend
Lenders are confident the U.S. will pay them back
Interest is illegal
Because the U.S. has no debt
What future trend could help reduce debt problems?
More wars
More retirees
Slower growth in healthcare costs
Higher spending
