Question 1

Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?

Accepted Answer

Income security, which includes expenditures such as Social Security, unemployment benefits, and food and nutrition assistance, has consistently accounted for the largest percentage of total federal government expenditures in recent years.

Question 2

After 1970, the share of federal spending allocated to national defense:

Accepted Answer

After 1970, there was a significant decrease in defense spending, while there was a substantial increase in income security spending. As a result, choice A is the best fit.

Question 3

Total U.S. government expenditures as a percentage of GDP were largest during which of the following periods of time?

Accepted Answer

During World War II, government expenditures were significantly high due to the war effort. In 1944, government expenditures were at 44% of GDP, the highest percentage in U.S. history.

Question 4

Which of the following is the largest source of revenue for the federal government?

Accepted Answer

The personal income tax is the largest source of revenue for the federal government, accounting for approximately 50% of all revenue collected. The corporate income tax and user charges are much smaller sources of revenue, while the payroll tax primarily funds Social Security and Medicare and is used for specific programs rather than general government operations.

Question 5

Income security expenditures include

Accepted Answer

Income security expenditures include programs such as Medicare, Social Security, and unemployment compensation that aim to provide financial support and security to individuals who may be elderly, disabled, or unemployed. These programs are funded through payroll taxes and other sources, and they play a crucial role in ensuring economic stability and welfare for many Americans.

Question 6

Government expenditures are different from the government national income account (G) in that:

Accepted Answer

Government expenditures include transfer payments such as social security and welfare, while the government national income account (G) does not include these payments.

Question 7

Total government spending (federal, state, and local) sums to approximately:

Accepted Answer

According to the Bureau of Economic Analysis, total government spending in the United States amounted to approximately 40 percent of the U.S. economy (GDP) in 2019.

Question 8

The burden of taxation in the United States

Accepted Answer

The burden of taxation in the United States has increased since 1929 due to the expansion of government programs and services, which require higher tax revenues to support.

Question 9

Which of the following lists tax revenue sources from greatest to least?

Accepted Answer

Individual income taxes typically constitute the largest source of tax revenue for the federal government, followed by social insurance taxes (such as Social Security and Medicare taxes), corporate income taxes, and then excise and other taxes.

Question 10

Since 1929, total government taxes as a percentage of GDP:

Accepted Answer

According to historical data, total government taxes as a percentage of GDP in 1929 were around 10 percent. Today, they are around 30 percent, which means that they have climbed from 10 percent to about 30 percent over time.

Question 11

Which of the following countries devote the smallest percentage of its GDP to taxes?

Accepted Answer

United States devotes the smallest percentage of its GDP to taxes among the given options.

Question 12

Measured as a share of the economy, total government expenditures:

Accepted Answer

Total government expenditures as a share of the economy have indeed increased significantly since 1929, rising from less than 10 percent to about 35 percent in recent years. This reflects the expansion of government activities and programs over time.

Question 13

Which of the following statements best describes government expenditure patterns?

Accepted Answer

Data shows that since 1950, the government's share of total economic activity has generally increased. However, the growth in government expenditures as a percentage of GDP is mostly due to rapidly growing federal government transfer programs, such as Social Security, Medicare, and Medicaid. Defense spending has remained relatively stable as a percentage of GDP. Political party in control has not been found to have a significant impact on government expenditure patterns.

Question 14

Describe the two basic philosophies of taxation fairness.

Accepted Answer

The answer of Describe the two basic philosophies of taxation...

Question 15

At the federal level, the single most important tax, accounting for slightly less than half of revenue, is the:

Accepted Answer

The personal income tax is the single most important tax at the federal level, accounting for slightly less than half of revenue. This is because it applies to all individuals earning income, which encompasses a large portion of the population. The corporate income tax, while still significant, accounts for a smaller portion of revenue. Sales and property taxes are typically imposed at the state and local levels, not the federal level.

Question 16

Suppose fairness is defined as those with the highest incomes can afford to pay a greater proportion of their income in taxes. Then which of the following taxation systems would be consistent with this notion of fairness?

Accepted Answer

A progressive tax on income would be consistent with the notion of fairness that those with the highest incomes can afford to pay a greater proportion of their income in taxes. A flat tax or fixed federal tax would not take into account the ability to pay, and a flat sales tax would disproportionately affect low-income individuals who spend a larger proportion of their income on consumption purchases.

Question 17

Government expenditures as a share of the U.S. economy are:

Accepted Answer

While government expenditures as a share of the U.S. economy are high, they are smaller than most Western European countries. The U.S. ranks 19th out of 36 countries in the Organization for Economic Cooperation and Development (OECD) in terms of government spending as a share of GDP.

Question 18

Comparing total taxes as a percentage of GDP in the United States to Western European countries, such as the France, Norway, and Sweden,

Accepted Answer

The United States has a lower total tax burden as a percentage of GDP compared to Western European countries like France, Norway, and Sweden, which typically have higher tax rates to support extensive social welfare programs.

Question 19

Describe the major sources of tax revenue and expenditures for the federal government.

Accepted Answer

The answer of Describe the major sources of tax revenue...

Question 20

Which of the following statements best answers the question of how burdensome overall taxation is in the United States?

Accepted Answer

This statement directly addresses the question of how burdensome overall taxation is in the United States by comparing it to other industrialized countries and stating that U.S. citizens are among the most lightly taxed. Choice A provides information on a specific type of tax, choice B provides information on the largest source of federal revenue but does not address the overall burden of taxation, and choice C makes a general statement about the relationship between taxation and public services but does not provide specific information on the U.S. tax burden.

Quiz 16: The Public Sector