United States Debt Quiz
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There has been much talk and debate about the debt ceiling, the federal deficit, etc. Test your smarts about this sensitive issue with our on-line quiz!
- 1.
What does the term "debt ceiling" really mean?
- A.
The ceiling of the White House
- B.
The maximum borrowing power of a governmental entity.
- C.
The line of credit for a home equity loan
Correct Answer
B. The maximum borrowing power of a governmental entity.Explanation
The term "debt ceiling" refers to the maximum borrowing power of a governmental entity. It is a limit set by the government on the amount of money it can borrow to finance its operations and pay its obligations. This limit is usually set by legislation and serves as a control mechanism to prevent excessive borrowing and ensure fiscal responsibility. When the debt ceiling is reached, the government must either reduce spending or increase revenue to avoid defaulting on its debts.Rate this question:
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- 2.
With the current debt ceiling nearly at 15 trillion, the U.S. government is considering increasing the limit.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement suggests that the U.S. government is considering increasing the debt ceiling, which implies that the current debt ceiling is nearly at 15 trillion. Therefore, the statement is true.Rate this question:
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- 3.
What is the deadline for the U.S. to take action on the proposal to raise the debt ceiling?
- A.
August 2
- B.
August 30
- C.
Sept. 11
- D.
Sept. 30
Correct Answer
A. August 2Explanation
Aug. 2 is the deadline for action by Congress to raise the government's $14.3 trillion debt limit.Rate this question:
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- 4.
What happens if Congress does not meet the deadline?
- A.
Nothing
- B.
The stock market crashes
- C.
Trigger a default on loans
Correct Answer
C. Trigger a default on loansExplanation
Without action by that date, the Treasury will be unable to pay all its bills, possibly triggering a default that could have severe consequences for the U.S. economy and the world's, too.Rate this question:
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- 5.
Are there rival debt-limit emergency fallback plans?
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
The Republicans and Democrats each have rival debt-limit emergency fallback plans.Rate this question:
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- 6.
Who is John Boehner?
- A.
Comedian
- B.
Author
- C.
Economist
- D.
House Speaker
Correct Answer
D. House SpeakerExplanation
John Boener is House Speaker and lead GOP proponent of a plan to raise the nation's borrowing authority and cut spending by a greater amount.Rate this question:
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- 7.
Is it possible that America's AAA credit could be downgraded?
- A.
Yes
- B.
No
Correct Answer
A. YesExplanation
Yes, it is possible for America's AAA credit rating to be downgraded. Credit ratings are determined by credit rating agencies based on various factors such as the country's economic performance, debt levels, and political stability. If any of these factors deteriorate significantly, it could lead to a downgrade in the credit rating. Additionally, changes in fiscal policies, government spending, or economic shocks can also impact the credit rating. Therefore, it is possible for America's AAA credit to be downgraded if there are negative changes in these factors.Rate this question:
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- 8.
The Boehner plan calls for the debt limit to be raised by how many billions of dollars?
- A.
$9 billion
- B.
$25 billion
- C.
$500 billion
- D.
$900 billion
Correct Answer
D. $900 billionExplanation
The plan calls for the debt limit to be raised by $900 billion, with accompanying spending cuts of about $917 billion over the next decade.Rate this question:
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- 9.
Using 2010 figures, the International Monetary Fund places the total U.S. debt at 96.3% of GDP, ranked 12th highest against other nations. True or False?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The given statement is true. According to the International Monetary Fund's 2010 figures, the total U.S. debt is 96.3% of GDP. This places the U.S. debt as the 12th highest among other nations.Rate this question:
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- 10.
What will be affected by a high debt level?
- A.
Inflation
- B.
Interest rates
- C.
Economic growth
- D.
All of the Above
Correct Answer
D. All of the AboveExplanation
A high debt level can have several negative effects on an economy. Firstly, it can lead to inflation as the government may resort to printing more money to pay off its debts, thereby increasing the money supply and reducing the value of the currency. Secondly, high debt levels can result in higher interest rates as lenders demand higher returns to compensate for the increased risk. This can make borrowing more expensive for individuals and businesses, which can slow down economic growth. Therefore, all of the above factors can be affected by a high debt level.Rate this question:
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- 11.
How many trillions of dollars is Senate Majority Leader Harry Reid's (D-Nev.) debt ceiling proposal?
- A.
$1 trillion
- B.
$2 trillion
- C.
$2.7 trillion
- D.
$5 trillion
Correct Answer
C. $2.7 trillionExplanation
The correct answer is $2.7 trillion. This is the amount of dollars in Senate Majority Leader Harry Reid's debt ceiling proposal.Rate this question:
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- 12.
The first dramatic growth spurt in the history of U.S. debt occurred because of what war?
- A.
The War of 1812
- B.
The Civil War
- C.
World War I
- D.
World War II
Correct Answer
A. The War of 1812Explanation
The first dramatic growth spurt of the debt occurred because of the War of 1812. In the first 20 years following the War of 1812, 18 surpluses were experienced and the US paid off 99.97% of its debt.Rate this question:
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- 13.
When did the United States last have a surplus?
- A.
1952
- B.
1998
- C.
2001
- D.
2010
Correct Answer
C. 2001Explanation
According to the CBO (Congressional Budget Office), the the U.S. last had a surplus during fiscal year (FY) 2001.Rate this question:
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Apr 24, 2024Quiz Edited by
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Dec 02, 2011Quiz Created by
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