Chapter 16:
Government Spends, Collects, and Owes
1.
We can examine the rate of government growth by analyzing the increase of __________
a.
new government services and the government's labor force.
b.
the government's allocation of funds.
c.
the government's labor force.
d.
new government services.
2.
One of the reasons for the huge growth in government since the 1950s, according to economists, is that __________
a.
because the United States has grown in population over the last 50 years, more services are required.
b.
the government spent billions of dollars to finance World War II.
c.
the Great Depression required the government to provide more services.
d.
as the nation grew richer, people demanded more government services to even out certain income inequities.
3.
Of the following public goods, only the federal government provides __________
a.
law-enforcement agencies.
b.
national defense.
c.
roads.
d.
public education.
4.
Which is the following is NOT a way in which the government exercises its role in the area of demerit goods?
a.
regulating them
b.
prohibiting them
c.
taxing them
d.
manufacturing them
5.
The government redistributes income through __________
a.
social security and public education.
b.
public education and worker's compensation.
c.
social insurance programs and public-assistance programs.
d.
social insurance programs and public education.
6.
Criticisms of government involvement in the economy include all the following EXCEPT __________
a.
people are not deserving of public assistance.
b.
government regulations raise the prices of goods and services being produced.
c.
government assistance discourages personal progress.
d.
public goods can and should be provided by private organizations.
7.
The federal budget-making process does NOT include __________
a.
congressional review through the use of committees and subcommittees.
b.
presidential submission to Congress.
c.
presidential approval of budget requests by the various departments and agencies.
d.
approval by the voters.
8.
The federal government's largest expenditures include all EXCEPT __________
a.
interest on the national debt.
b.
health care.
c.
education.
d.
national defense.
9.
By far, the largest single expenditure for state and local governments is __________
a.
public welfare.
b.
education.
c.
police and fire departments.
d.
national defense.
10.
When the government spends more than it takes in, the government must raise extra funds through borrowing. This situation is called __________
a.
overdraft spending.
b.
buying on credit.
c.
balancing the budget.
d.
deficit financing.
11.
Which situation describes the benefits-received principle of taxation?
a.
federal taxes to pay for public goods
b.
property taxes to pay for local public schools
c.
taxes on imports
d.
a gasoline tax to pay for highway construction and repair
12.
The ability-to-pay principle of taxation is based on the idea that __________
a.
because people with higher incomes use more government services, they should pay more taxes to support the services.
b.
because people with lower incomes use more government services, they should pay more taxes to support the services.
c.
people with higher incomes can afford to pay more taxes than those with lower incomes.
d.
people with lower incomes can afford to pay more taxes than those with higher incomes.
13.
Our federal individual income tax system is an example of which form of taxation?
a.
benefits-received tax
b.
regressive tax
c.
progressive tax
d.
proportional tax
14.
A state sales tax on food __________
a.
is a regressive tax that hits lower-income families the hardest.
b.
hits middle-income families the hardest.
c.
is a proportional tax.
d.
is a progressive tax that hits higher-income families the hardest.
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Unit 1
Unit 2
Unit 3
Unit 4
Unit 5
Unit 6
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
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