Deck 1: The Public Sector

Question 1

As a percentage of total federal revenue,excise taxes have _____.

A)risen slightly since 1960
B)remained constant since 1960
C)risen considerably since 1960
D)fallen since 1960

Answer 1

D

Question 2

In 1902,total government expenditures at all levels of government were around _____.

A)10 percent of GDP
B)20 percent of GDP
C)30 percent of GDP
D)40 percent of GDP

Answer 2

A

Question 3

The government's economic programs and policies in the United States _____.

A)are determined mostly by professional economists
B)are largely determined by looking at what other countries are doing
C)are a product of a democratic political system
D)are largely determined by corporations

Answer 3

C

Question 4

Expenditures on human resources comprise about ????_____ of federal expenditures.

A)half
B)one-third
C)one-fourth
D)two-thirds

Question 5

An understanding of the principles of public sector economics can help us create _____.

A)innovative public policies
B)a more effective government
C)a protective government that better shields its citizens from risk
D)new spending programs

Question 6

Total government revenues in the United States are about _____ percent of GDP.

A)25
B)17
C)45
D)30

Question 7

The expenses of the U.S.Postal Service _____.

A)generally do not count towards total government expenditures
B)are around two percent of total government expenditures
C)are around one percent of total government expenditures
D)are around five percent of total government expenditures

Question 8

Which of the following is not true?

A)In democratic countries,governmental decisions are made by some collective decision-making procedure.
B)Political decisions influence the economy.
C)Government ownership of industries is quite common.
D)Showing that markets do not allocate resources efficiently is all that is necessary to show that government can allocate resources more efficiently.

Question 9

Social insurance revenues _____ come from _____.

A)primarily;Social Security payroll taxes
B)primarily,Medicare taxes
C)primarily;Social Security payroll taxes and Medicare taxes
D)do not;Social Security payroll taxes

Question 10

As a percentage of total federal expenditures,national defense spending has _____ since the mid 1950s.

A)slightly increased
B)risen precipitously
C)essentially stayed the same
D)declined

Question 11

As a percentage of total federal revenues the corporate income tax has _____.

A)increased since 1960
B)declined since 1960
C)fallen during the 1980s,but risen since 1992
D)remained fairly constant since 1960

Question 12

The difference between government receipts and government expenditures is called a _____.

A)loss
B)shortfall
C)deficit
D)debt

Question 13

As a percentage of total federal revenues,the individual income tax has _____.

A)increased substantially since 1960
B)declined substantially since 1960
C)increased slightly since 1960
D)declined slightly since 1960

Question 14

Which of the following is ??not true?

A)In the 1950s,federal defense expenditures were larger than federal human resource expenditures.
B)In 1995,federal defense expenditures were less than five percent of GDP.
C)Federal expenditures on defense exceeded federal human resource expenditures until 1989.
D)Federal defense expenditures have been declining continuously since the 1950s.

Question 15

To understand the public sector,we must understand not only how government allocates resources,but also the importance role that _____ play in the policy-making process.

A)corporations
B)families
C)politics
D)individuals

Question 16

The bulk of federal budget receipts come from ______.

A)individual income taxes
B)social insurance revenues
C)corporation income taxes
D)excise taxes

Question 17

Federal government expenditures in the United States comprise about _____ of total government expenditures.

A)90 percent
B)75 percent
C)60 percent
D)45 percent

Question 18

In 2002,the United States contained around _____ governmental units at all levels.

A)ninety thousand
B)twelve thousand
C)fifty
D)five hundred and thirty-five

Question 19

When compared to national defense expenditures,human resources expenditures _____.

A)declined substantially during the 1980s
B)have remain stable since the 1950s
C)are a smaller percentage of GDP
D)have increased substantially since the mid 1960s

Question 20

In 2003,the federal budget deficit was about _____ percent of gross domestic product.

A)three
B)zero
C)seven
D)ten

Question 21

If an individual's budget constraint shifts,the individual's changes in consumption can be broken down into _____ and _____ effects.

A)budget;consumption
B)income;substitution
C)utility;indifference
D)wealth;savings

Question 22

Which of the following statements is not true?

A)It is difficult to compare government expenditure across countries because of the varying degrees of "off budget" government activities.
B)Government expenditure as a percentage of GDP is higher in the United States than in Ireland.
C)The United States has experience significant expenditure growth at the federal,state,and local levels during the 20th century.
D)Significant expenditure growth at the federal,state,and local levels during the 20th century has given the United States one of the highest levels of government expenditures as a percentage of GDP among similar countries.

Question 23

U.S Postal Service spending is generally not included in total government expenditures.

Question 24

Which of the following statements are not true?

A)Indifference curves do not have to be downward sloping.
B)Indifference curves depict the level of well-being that a person experiences in consuming different combinations of goods and services.
C)The higher the indifference curve,the higher the consumer's welfare.
D)An individual is indifferent between different bundles of goods and services at any point along an indifference curve.

Question 25

The individual's budget constraint is _____.

A)the amount of money she has in the bank
B)determined by dividing the individuals income by the price of the goods she wants to buy
C)the maximum amount one good she can consume given her consumption of other goods
D)a line depicting all the possible budgets an individual could have at various occupations

Question 26

For goods on which a relatively small portion of income is expended,_____.

A)income effects will be small relative to substitution effects
B)income effects will be large relative to substitution effects
C)income effects will be about the same as substitution effects
D)there will be no income effects.

Question 27

When compared with other governments around the world,government spending in the United States as a percentage of GDP_____.

A)is generally lower than similar countries
B)is generally higher than similar countries
C)is about average relative to similar countries
D)is impossible to compute because of differences between countries

Question 28

In a representative democracy,some responsibility for government extends to all citizens.

Question 29

Markets do not always allocate resources efficiently,however,government always does.

Question 30

Even in a market-oriented economy such as the United States,the government allocates about a twentieth of the nation's resources.

Question 31

In 2002,government expenditures as a percentage of GDP were lowest for which country?

A)United States
B)South Korea
C)Ireland
D)Japan

Question 32

In 2003,federal government expenditures as a percentage of GDP were around _____.

A)10 percent
B)20 percent
C)30 percent
D)40 percent

Question 33

Which of these actions will occur to the budget constraint when an individual's income increases?

A)shifts outward
B)shifts backward
C)rotates clockwise
D)cannot be determined from the information given

Question 34

Which of the following is true?

A)The higher the indifference curve,the lower the consumer's welfare.
B)The higher the indifference curve,the higher the consumer's welfare.
C)The height of the indifference curve has no relationship to consumer welfare.
D)The higher the indifference curve,the more money the individual has.

Question 35

In 2002,government expenditures as a percentage of GDP were lowest for which country?

A)Sweden
B)United States
C)Germany
D)France

Question 36

Over the course of the 20th century,_____.

A)federal government expenditures have grown less than state and local expenditures
B)federal government expenditures have increased substantially as a percentage of GDP
C)federal government expenditures remained fairly constant except during wartime
D)federal government expenditures have always been higher than the expenditures of state and local governments.

Question 37

The utility maximizing consumption bundle for an individual can be found by locating _____.

A)the individual's bliss point
B)any point on an indifference curve touching the budget constraint
C)the highest point on an individual's indifference curve
D)the point tangent to an individual's budget constraint

Question 38

Which of the following statements is not true?

A)Federal government expenditures grew rapidly during the 1960s.
B)State and local expenditures rose during the twentieth century.
C)Federal government expenditures always exceeded combined state and local expenditures during the 20th century.
D)Total government expenditures rose steadily during the twentieth century.

Question 39

Government ownership of industries is quite uncommon.

Question 40

When isolating the substitution effect of a change in an individual's budget constraint,_____ is held constant.

A)utility
B)budget
C)income
D)consumption

Question 41

Briefly discuss the source of federal government revenues.Give special attention to the evolution of revenue sources since the 1960s.

Question 42

Total government expenditure as a percentage of GDP is lower in the United States than in Sweden.

Question 43

Federal government expenditures account for more than two-thirds of the money spent in the public sector.

Question 44

Social insurance taxes and individual income taxes comprise more than 80 percent of federal revenues.

Question 45

The deficit is financed through new taxes.

Question 46

The size and scope of government in the United States changed considerably over the twentieth century.Trace the history of government spending over the twentieth century.Your answer should discuss the relative magnitude of any changes as well as any changes to the distribution between federal and state and local sources.

Question 47

In the mid-1950s,the federal government was spending twice as much on national defense as it was spending on human resources.

Question 48

State and local governments were smaller than the federal government in 1900.

Question 49

Suppose that an economic analysis of the communications industry finds that resources are not allocated as efficiently as is theoretically possible.From this the report's authors suggest that government should take steps X and Y to improve resource allocation in the industry.Provide a short discussion of why their proposed solution might not be better than the current situation.

Question 50

Briefly discuss some of the difficulties that exist when comparing the size of the government sectors across economies.Provide examples.

Question 51

Briefly describe how federal government expenditures have changed since the 1950s.Give special attention to the distribution of spending among between defense and human resources.