1. Define business cycles. How is national debt affected by business cycles?

2. Given 2 examples of programs that are "off-budget" in the U.S. federal government budget. Is the U.S. federal government currently running an off-budget deficit or surplus? Why?

3. Define "cyclical deficit" and "structural deficit." Are "cyclical deficits" more or less of a concern than "structural deficits"? Why or why not?

4. Draw a supply and demand diagram representing the bonds market. Explain in words and show on the diagram the effects of increasing government borrowing on the price and yield of bonds. Label the diagram carefully and show any shift of the curve(s) clearly.

5. What is the likely impact of large and growing national debt on investment by private firms?Support your answers with a diagram illustrating the effects of budget deficits in the loanable funds market. Label the diagram carefully and show any shift of the curve(s) clearly.

6. Explain the likely impact of large and growing national debt on the future generations of a debtor nation via the "inter-generational income transfer" and the "inter-country income transfer" perspectives.