Deck 1: Introduction

Question 1

Public finance

A)is not like public economics.
B)develops principles for understanding the economic role of government.
C)only works for local and state governments.
D)is all of the above.

Answer 1

develops principles for understanding the economic role of government.

Question 2

State and local governments receive the largest amount of revenue from

A)personal income taxes.
B)property taxes.
C)sales taxes.
D)payroll taxes.

Answer 2

sales taxes.

Question 3

Economics

A)started as a business application
B)can never be defined.
C)is the study of unlimited wants but limited resources.
D)has no "real world" relevance.

Answer 3

is the study of unlimited wants but limited resources.

Question 4

Government output is hard to account for because government

A)is so large.
B)provides goods that have no resale value.
C)keeps secrets about what it produces.
D)goods are generally not sold or produced in easily measurable units.

Question 5

A government good or service includes

A)bridges.
B)parks.
C)national defense.
D)all of the above.

Question 6

The unified budget is

A)a budget that includes all nations.
B)a document which itemizes all the federal government's expenditures and revenues.
C)a document that accounts for all spending by states.
D)none of the above.

Question 7

A very small portion of government expenditures is financed by taxes.

Question 8

A regulatory budget would

A)provide an accounting of government regulation.
B)be difficult to compute.
C)have to be attempted unofficially.
D)be all of the above.

Question 9

In 2009,the federal budget was almost

A)1 million pages long.
B)17 pages long.
C)1,300 pages long.
D)500 pages long.

Question 10

Taxes

A)are mandatory payments.
B)are necessary for financing government expenditures.
C)do not directly relate to the benefit of government goods and services received.
D)are all of the above.

Question 11

In 1965,national defense was just as large a general expenditure as Social Security.

Question 12

Politics

A)play no role in public finance.
B)influence government decisions.
C)have to be factored into economic decision making.
D)do all of the above.

Question 13

The federal government

A)is the largest taxing entity in the country.
B)is only concerned with international issues.
C)spends heavily on net interest.
D)is all of the above.

Question 14

Individuals

A)are too small to matter in macroeconomic decision making.
B)need to participate in a democracy.
C)make up the government.
D)a and b.
E)b and c.

Question 15

In a pure market economy,

A)there is no role for government.
B)government intervention might be needed.
C)large markets where people meet to buy and sell are required.
D)all of the above.

Question 16

Education is

A)generally financed at the state and local level.
B)too expensive for the federal government.
C)generally financed at the federal level.
D)financed on a voluntary basis.

Question 17

Social insurance has become an increasingly large portion of federal taxes because of the "Baby Boomer" generation.

Question 18

Economists who study the role of government in the market

A)agree mostly on the role that the government should play.
B)study for market problems that the government might help solve.
C)find that supply and demand graphs never work for the government.
D)do none of the above.

Question 19

The federal government gets most of its revenue from

A)personal income taxes.
B)property taxes.
C)sales taxes.
D)payroll taxes.

Question 20

For the government to provide goods and services,citizens

A)have to come to an agreement about how much is needed.
B)have to agree on a method of financing.
C)need to be informed about the opportunity costs.
D)must do all of the above.

Question 21

Local governments rely heavily on property taxes.

Question 22

Interest on the national debt,as a percentage of federal expenditures,has increased significantly since 1965.

Question 23

Personal income and Social Security payroll taxes are currently the largest sources of government revenue.

Question 24

Do you think it is correct policy that the federal government is not required to finance all of its expenditures with tax revenues and is allowed to borrow? What are the implications of this policy?

Question 25

Payroll taxes are a major financing tool at the federal level.

Question 26

In 2005,the federal government spent 345.8 billion dollars on income security.

Question 27

Why do/should we care that federal expenditures are becoming an increasingly larger portion of GDP?

Question 28

The Constitution of the United States says nothing about state economic activity.

Question 29

Discuss your views on government intervention regarding tobacco consumption.

Question 30

Expenditures,as a percentage of GDP for the United States,are not very different than those of other industrialized nations.

Question 31

Write an essay discussing some of the reasons that federal expenditures for Social Security have increased since 1965.