The document discusses key concepts regarding government budget deficits and surpluses. It provides 6 multiple choice questions related to: 1) how budget surpluses impact the economy in the long run; 2) the definition of a budget deficit or surplus; 3) how deficits and surpluses should be viewed; 4) calculating the impact of simultaneous spending increases and tax raises; 5) how automatic stabilizers affect the budget during an economic recovery; and 6) challenges around altering mandatory spending programs.

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1.In the long-run framework, budget surpluses
2. The budget deficit or surplus is
3.Deficits and surpluses are best viewed as
4.Suppose the government increases spending by $30 billion and raises taxes at by
$20 billion at the same time. Then,
5 Because automatic stabilizers lower transfer payments and raise tax receipts as an
economy recovers from a recession, they
6.Most of the government budget is mandatory spending through programs like
Medicare and Social Security, and much of the rest is politically difficult to alter.
Because of this,