ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw

Exercise 2

The information in many of the tables in this chapter can be found in the Economic Report of the President, which appears annually. Using a recent issue of the report at your library or on the Internet, answer the following questions and provide some numbers to support your answers. (Hint: The website of the Government Printing Office is http://www.gpo.gov.)
a. Figure 1 shows that government revenue as a percentage of total income has increased over time. Is this increase primarily attributable to changes in federal government revenue or in state and local government revenue?
b. Looking at the combined revenue of the federal government and state and local governments, how has the composition of total revenue changed over time? Are personal income taxes more or less important? Social insurance taxes? Corporate profits taxes?
c. Looking at the combined expenditures of the federal government and state and local governments, how have the relative shares of transfer payments and purchases of goods and services changed over time?