Deck 11: Federal Spending

Question 1

Federal tax dollars can be spent only if

A)Congress passes a law that the President signs.
B)Congress passes a law and overrides a veto.
C)Congress passes a law and fails to override the veto.
D)Congress passes a law that the President signs and overrides a veto.

Answer 1

D

Question 2

In 2016, the largest item in the Federal Budget was

A)Social Security.
B)Medicaid.
C)welfare.
D)international aid.

Answer 2

A

Question 3

Laws that change the tax code must begin

A)in the House of Representatives.
B)in the Senate.
C)with the President.
D)none of these, they may begin anywhere.

Answer 3

A

Question 4

Federal Spending in 2016 was

A)$4 trillion.
B)$4 billion.
C)$40 trillion.
D)$400 trillion.

Question 5

In planning for a Fiscal year which of the following is supposed to happen first

A)an appropriations bill.
B)a continuing resolution.
C)a budget bill.
D)a Presidential veto.

Question 6

Prior to 2009, Federal Spending as a percentage of GDP had peaked in

A)1973.
B)1976.
C)1982.
D)2005.

Question 7

The fiscal year for the Federal government begins

A)January 1.
B)July 1.
C)October 1.
D)December 1.

Question 8

A continuing resolution allows spending to go on

A)as long as the resolution states.
B)for no longer than a week.
C)for no longer than a year.
D)for no longer than a day.

Question 9

Logrolling occurs when

A)budget deficits snowball out of control.
B)members of Congress trade votes to get their programs passed.
C)forest companies use their political muscle.
D)members of Congress doctor their expense logs.

Question 10

Between 2009 and 2011, Federal Spending as a percentage of GDP ranged between

A)16% and 22%.
B)22% and 25%.
C)35% and 45%.
D)47% and 61%.

Question 11

The United States Constitution states that

A)Congress and the President must agree on spending.
B)a law must be passed to approve spending for a government activity.
C)the President may spend money according to his/her own priorities.
D)a law must be passed to approve spending for a government activity that Congress and the President agree on.

Question 12

In 2016, the largest item in the Federal Budget was

A)national defense & homeland security.
B)Medicaid.
C)welfare.
D)international aid.

Question 13

The large budget deficits of 2003 and 2006 meant that the federal government was borrowing upwards of $1.7 trillion over this four-year period. If that borrowing limits the ability of the private sector to get financial capital for its purposes economists would call this

A)crowding in.
B)forcing in.
C)crowding out.
D)forcing aside.

Question 14

In 2016, the largest item in the Federal Budget was

A)national defense & homeland security.
B)interest on the national debt.
C)welfare.
D)international aid.

Question 15

Programs such as Social Security and Medicare

A)have to be re-authorized every year.
B)do not require re-authorization.
C)can be cut by the President without congressional approval.
D)have to be re-authorized every year and can be cut by the President without congressional approval.

Question 16

If logrolling occurs during the creation of a highway construction bill, this means that

A)members of Congress are taking bribes.
B)members of Congress are agreeing to support someone else's highway so that other members will support their own projects.
C)the total costs are being trimmed.
D)the bill is moved so fast through the process that no member of Congress can get their project included.

Question 17

The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes economists would call this

A)crowding in.
B)forcing in.
C)crowding out.
D)forcing aside.

Question 18

The enormous budget deficits of 2009 through 2011 meant that the federal government was borrowing upwards of $1.5 trillion per year. If that borrowing had limited the ability of the private sector to get financial capital for its purposes economists would call this crowding out. There was

A)significant evidence this was a problem because interest rates were very high.
B)little evidence this was a problem because interest rates were very low.
C)significant evidence this was a problem because interest rates were very low.
D)little evidence this was a problem because interest rates were very high.

Question 19

A continuing resolution allows

A)spending to continue as it has been for a specified period of time.
B)spending on Presidential priorities without Congressional approval.
C)Congress to spend money directly without Presidential signature.
D)spending to continue a program forever.

Question 20

Between 1955 and 2006, Federal Spending as a percentage of GDP ranged between

A)16% and 22%.
B)22% and 30%.
C)35% and 45%.
D)47% and 61%.

Question 21

When Congressional decision makers chose not to raise taxes to fight the war on terrorism they

A)showed that there is no opportunity cost to defense spending when you are required to spend it.
B)showed opportunity cost exists by eliminating Social Security.
C)showed that borrowed money has no opportunity cost.
D)borrowed the money but the opportunity cost still existed in the form of higher interest rates and/or crowding out.

Question 22

In 2014, national defense spending as a proportion of GDP was highest in

A)Japan.
B)the United Kingdom.
C)the United States.
D)Germany.

Question 23

When Congressional decision makers chose not to raise taxes to fight the war on terrorism they

A)eliminated the opportunity cost of war.
B)borrowed the money, moving the opportunity cost into higher interest rates and/or crowding out.
C)exploited the fact that borrowed money has no opportunity cost.
D)printed all of the money required to fight the war on terrorism.

Question 24

Spending on programs for which there is no existing legal obligation to continue is called

A)discretionary.
B)entitlement spending.
C)mandatory.
D)non-obligatory.

Question 25

The trends in the share of mandatory and discretionary spending suggest that the percentage attributable to

A)mandatory spending is rising but so is the percentage attributable to discretionary spending.
B)mandatory spending is falling but so is the percentage attributable to discretionary spending.
C)mandatory spending rose from the late 1960s through the middle 1990s stabilized for a few years and then began to rise again.
D)discretionary spending rose from the late 1960s through the middle 1990s but has stabilized.

Question 26

Projections of the trajectory of inflation adjusted health spending made in 2016 had

A)it growing.
B)it falling.
C)it remaining relatively constant.
D)it acting like a sine wave.

Question 27

In advising Congress and the President on how much to increase defense spending in response to security concerns, economists would suggest that they evaluate the

A)total cost of defense versus its total benefit.
B)average cost per citizen of defense versus its average benefit.
C)marginal cost of each additional dollar spent on defense versus its marginal benefit.
D)median cost per citizen of defense versus its median benefit.

Question 28

The portion of Federal Spending devoted to national defense has

A)risen constantly since 1960.
B)remained constant since 1960.
C)decreased markedly with small increases during Vietnam, the early 1980's and 2001.
D)bounced around with no apparent pattern.

Question 29

Spending on programs for which there is an existing legal obligation is labeled

A)discretionary.
B)entitlement spending.
C)mandatory.
D)obligatory.

Question 30

Real federal spending on Health Care functions has

A)risen constantly since 1960.
B)remained constant since 1960.
C)decreased markedly with small increases in early 1980's.
D)bounced around with no apparent pattern.

Question 31

Mandatory spending makes up

A)well under half of all spending.
B)just over half of all spending.
C)just under exactly half of all spending.
D)well over half of all spending.

Question 32

Crowding out is an example of

A)opportunity cost.
B)correlation is not necessarily causation.
C)fallacy of composition.
D)a lost cause.

Question 33

The percentage of the federal budget devoted to Social Security has

A)increased dramatically over the last decade.
B)decreased dramatically over the last decade.
C)remained steady over the last decade.
D)has always been negligibly small.

Question 34

The largest single item in the Federal Budget is

A)defense.
B)interest on the debt.
C)Social Security.
D)foreign aid.

Question 35

Discretionary Spending makes up

A)just over 30% of all federal spending.
B)just over 50% of all federal spending.
C)exactly half of all federal spending.
D)well over 65% of all federal spending.

Question 36

Compared to other industrialized nations around the globe, defense spending as a percentage of GDP is

A)substantially higher than that of the next highest nation.
B)somewhat higher than France and the United Kingdom but much less than Germany and Japan.
C)somewhat higher than France and the United Kingdom and much higher than Germany and Japan.
D)lower than France, the United Kingdom, Germany or Japan.

Question 37

Generally, economists believe that crowding out is

A)complete; one extra dollar in government spending decreases private spending by a dollar.
B)complete fiction.
C)important but less than complete; one extra dollar of government spending decreases private spending by less than a dollar.
D)actually reversed; one extra dollar of government spending increases private spending.

Question 38

Projections of the trajectory of discretionary relative to mandatory spending made in 2016 had

A)mandatory spending's portion growing.
B)discretionary spending's portion growing.
C)both mandatory and discretionary spending remaining relatively constant.
D)The two remaining equal for the next decade.

Question 39

Which of the following is part of non-defense discretionary spending?

A)Medicare.
B)Interest on the debt.
C)Social Security.
D)Education and training.

Question 40

Crowding out is the idea that when

A)government spending is increased private spending must decrease.
B)government spending is increased in one area it must be decreased in another.
C)private spending is increased it must be decreased in another.
D)one entitlement recipient enters a program, another must leave.

Question 41

Federal spending as a percentage of GDP is currently expected to

A)increase dramatically between 2014 and 2018.
B)remain constant at 40% between 2014 and 2018.
C)stabilize at 22% between 2014 and 2018.
D)decrease between 2014 and 2018.

Question 42

The federal spending appropriation for Education and Training in Fiscal Year 2016 was

A)$3 billion.
B)$13 billion.
C)$114 billion.
D)$183 billion.

Question 43

The federal spending appropriation for Agriculture in Fiscal Year 2016 was

A)$2 billion.
B)$26 billion.
C)$200 billion.
D)$283 billion.

Question 44

Using marginal analysis, an economist would judge the proper size of government by comparing

A)whether the last dollar spent on one program would have been better spent on another.
B)whether the last dollar spent would have been better left in private hands.
C)whether the last dollar spent garnered any value to society.
D)the amount spent with the amount spent in the previous year.

Question 45

Suppose Congress and the President are negotiating over whether to increase spending on defense or higher education, economists would suggest that they set the amount of spending

A)must be held constant.
B)where the total benefit to each is equal.
C)where the average amount spent per student equals the average amount spent per soldier.
D)on each program so that the marginal benefit of the last dollar spent on each area is equal.

Question 46

Using marginal analysis, an economist would judge the proper distribution of government spending by comparing

A)whether the last dollar spent on one program would have been better spent on another.
B)whether the last dollar spent would have been better left in private hands.
C)whether the last dollar spent garnered any value to society.
D)the amount spent with the amount spent in the previous year.

Question 47

After the September 11, 2001 terrorist attacks, non-defense, non-homeland security government spending

A)was cut.
B)increased, but at a rate much slower than it had before the attacks.
C)increased, but at a rate almost exactly the same as it had before the attacks.
D)increased at a rate much faster than it had before the attacks.

Question 48

Promises to quell logrolling for pet projects that were made by Democrats during the 2006 election

A)have been faithfully honored.
B)have not been honored, so that pet projects could be used to induce support for other priorities.
C)were thoroughly repudiated once the election was over.
D)have been declared unconstitutional by the U.S. Supreme Court.

Question 49

A policymaker that wants to make sure that the services of the government continue to be provided during a time when there are a growing number of people that rely on them is likely to argue for the use of

A)baseline budgeting.
B)current services budgeting.
C)crowding out.
D)regressive taxes.

Question 50

After the September 11, 2001 terrorist attacks federal government spending

A)was cut.
B)increased, but at a rate much slower than it had before the attacks.
C)increased, but at a rate almost exactly the same as it had before the attacks.
D)increased at a rate much faster than it had before the attacks.

Question 51

If $20 billion was spent on a program last year and $21 billion would be required to maintain services at the same level, then a budgeted figure of $20.5 billion would represent

A)an increase using current services budgeting and a cut using baseline budgeting.
B)an increase using either current services or baseline budgeting.
C)a cut using either current services or baseline budgeting.
D)an increase using baseline budgeting and a cut using current services budgeting.

Question 52

Foreign aid represents

A)less than a billion dollars in spending.
B)Just over 30 billion dollars.
C)is more than we spend on education loans, grants and work study combined.
D)no longer exists.

Question 53

Using baseline budgeting,

A)an increase in spending is spending greater than last year's spending.
B)an increase in spending is spending greater than that needed to keep up with inflation.
C)an increase in spending is spending greater than that needed to provide an unchanged level of services.
D)all budgets revert to zero at the beginning of each fiscal year.

Question 54

The increases in defense and federal law enforcement after the September 11, 2001 terrorist attacks was

A)in line with the increases before the attacks.
B)less than the increases that were slated before the attacks.
C)greater than the increases that preceded them but less than increases in spending in the other parts of the government.
D)greater than the increases that preceded them and greater than the increases in spending in the other parts of the government.

Question 55

Using current services budgeting

A)an increase in spending is spending greater than last year's spending.
B)an increase in spending is spending greater than that needed to keep up with inflation.
C)an increase in spending is spending greater than that needed to provide an unchanged level of services.
D)all budgets revert to zero at the beginning of each fiscal year.

Question 56

Prior to September 11, 2001, defense spending had ______ in inflation adjusted terms over the past 10 years and was at its ________ by that measure since WWII.

A)risen; highest
B)risen; lowest
C)fallen; highest
D)fallen; lowest

Question 57

The opportunity cost of rebuilding the Gulf Coast after hurricanes Katrina and Rita could be the

A)delay in availability of up-armored vehicles for use by U.S. troops in Iraq.
B)delay in rebuilding of highway bridges in Minnesota.
C)decrease in available Federal Student Loan funds.
D)all of the options are correct.

Question 58

The initial effect of the Troubled Asset Relief Program (TARP)upon the federal budget was to

A)allow federal spending to increase by as much as $750 billion.
B)eliminate the corporate income tax liabilities of major oil companies.
C)eliminate all opportunities for "logrolling" in the Congress.
D)all of the options are correct.

Question 59

The federal spending appropriation for Transportation projects in Fiscal Year 2016 was

A)$92 billion.
B)$179 billion.
C)$979 billion.
D)$1,979 billion.

Question 60

The appropriations process is

A)always smooth, regardless of the political landscape.
B)always rough, especially when the same political party controls both Congress and the White House.
C)seldom smooth, especially when different parties control Congress and the White House.
D)characterized by brief and dignified budget debates.

Question 61

Suppose there was a debate regarding military budgets and the Democrat was arguing for a budget increase from $400 billion to $405 billion and the Republican was arguing for the budget to increase to $425 billion. Further suppose military salaries and procurement of the same weapons systems are project to rise 2%. The Republican accuses the Democrat of proposing a cut to the military, the Democrat insists his plan increases military spending. What is going on here?

A)The Democrat is cutting the military only if you use current services budgeting.
B)The Republican is cutting the military only if you use baseline budgeting.
C)Both are proposing increases. The Republican is lying regardless of budgeting technique.
D)Both are proposing cuts. They are both lying regardless of budgeting technique.

Question 62

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. The Democrat says that, on average, infrastructure spending does the most good so more is better. The Republican is arguing that the extra cyber-security purchased by the extra spending will increase well-being the most. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 63

Suppose there was a debate regarding intelligence budgets and the Democrat was arguing for a budget increase from $40 billion to $41 billion and the Republican was arguing for the budget to increase to $45 billion. Further suppose intelligence salaries and procurement of the same spy systems are project to rise 5%. The Republican accuses the Democrat of proposing a cut to intelligence gathering, the Democrat insists his plan increases that spending. What is going on here?

A)The Democrat is cutting only if you use current services budgeting.
B)The Republican is cutting only if you use baseline budgeting.
C)Both are proposing increases. The Republican is lying regardless of budgeting technique.
D)Both are proposing cuts. They are both lying regardless of budgeting technique.

Question 64

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP)allotments. Suppose the most conservative Republican suggests an increase in defense spending. Each is arguing that their plan will get the most good for the money. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 65

Suppose there was a debate regarding student financial aid budgets and the Democrat was arguing for a budget increase from $40 billion to $50 billion and the Republican was arguing for the budget to increase to only $41 billion. Further suppose college costs were project to rise 10% even with the same number of students. The Democrat accuses the Republican of proposing a cut to education, the Republican insists his plan increases education spending. What is going on here?

A)The Republican is cutting education only if you use current services budgeting.
B)The Republican is cutting education only if you use baseline budgeting.
C)Both are proposing increases. The Democrat is lying regardless of budgeting technique.
D)Both are proposing cuts. They are both lying regardless of budgeting technique.

Question 66

The Obama Stimulus Plan of 2009 consisted of

A)$787 billion in tax cuts.
B)tax cuts, federal spending increases and aid to states.
C)$787 billion in immediate federal spending increases.
D)income tax rebate checks delivered to households in key states.

Question 67

The infamous "bridge to nowhere" was tucked into emergency spending intended for

A)the new lunar landing mission.
B)rebuilding after Hurricane Katrina.
C)the war in Iraq.
D)elimination of Medicare entitlements.

Question 68

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. The Democrat says that the extra infrastructure spending will decrease travel times and be the most valuable. The Republican is arguing that, on average, cyber-security is worth the money so more is better. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 69

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the centrist Democrat suggests an increase to infrastructure spending. Suppose the centrist Republican suggests an increase in cyber-defense spending. Each is arguing that their plan will get the most good for the money. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 70

The initial effect of the 2009 Obama Stimulus Plan upon the federal budget was to

A)eliminate all opportunities for "logrolling" in the Congress.
B)eliminate the corporate income tax liabilities of major oil companies.
C)increase the federal budget deficit by as much as $750 billion.
D)all of the options are correct.

Question 71

As the federal budget deficit increases,

A)increased interest obligations become more likely.
B)tax cuts become more likely.
C)federal borrowing is likely to decrease.
D)all of the options are correct.

Question 72

Suppose there was a debate regarding Medicaid budgets and the Democrat was arguing for a budget increase from $400 billion to $500 billion and the Republican was arguing for the budget to increase to only $410 billion. Further suppose health care costs are projected to remain constant though the number of eligible people is projected to rise 10%. The Democrat accuses the Republican of proposing a cut to health care, the Republican insists his plan increases Medicaid spending. What is going on here?

A)The Republican is cutting Medicaid only if you use current services budgeting.
B)The Republican is cutting Medicaid only if you use baseline budgeting.
C)Both are proposing increases. The Democrat is lying regardless of budgeting technique.
D)Both are proposing cuts. They are both lying regardless of budgeting technique.

Question 73

The long-established trend toward increasing mandatory federal spending was interrupted by the

A)new lunar landing mission.
B)Medicare prescription drug plan.
C)retirement of aging baby boomers.
D)Obama Stimulus Plan of 2009.

Question 74

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP)allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Republican says that, on average, military spending does the most good so more is better. The Democrat is arguing that the extra food purchased by the extra spending will increase well-being the most. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 75

Suppose there was a debate regarding how to spend $1 billion in newly found revenues in the budget. Suppose the most liberal Democrat suggests an increase to Food Stamp (SNAP)allotments. Suppose the most conservative Republican suggests an increase in defense spending. The Democrat says that, on average, Food Stamp spending does the most good so more is better. The Republican is arguing that the extra security purchased by the extra spending will increase well-being the most. What is going on here?

A)Both are employing marginal analysis, just from different perspectives
B)Only the Democrat is using marginal analysis.
C)Only the Republican is using marginal analysis.
D)Neither are using marginal analysis.

Question 76

The impending retirement of aging Baby Boomers is quite likely to re-establish the trend of

A)discretionary spending becoming an ever-larger share of total federal spending.
B)mandatory spending becoming an ever-smaller share of total federal spending.
C)mandatory spending becoming an ever-larger share of total federal spending.
D)discretionary and mandatory spending becoming virtually indistinguishable.