Deck 17: The Government Budgeting Process

Question 1

The president's budget is submitted to Congress fifteen days after Congress convenes in _____.

A)January
B)February
C)September
D)October

Answer 1

A

Question 2

The expenditures of government-owned corporations with budgets separate from the government's budget are called _____.

A)on-budget expenditures
B)off-budget expenditures
C)quasi-budget expenditures
D)private expenditures

Answer 2

B

Question 3

The federal government's fiscal year begins on ______ of the preceding calendar year.

A)January 1
B)April 15
C)October 1
D)December 31

Answer 3

C

Question 4

Prior to 1921,the President _____ the budget process.

A)played a significant role in
B)played a minor role in
C)played no direct role in
D)determined the nature of

Question 5

A direct implication of the special interest theory of government is that _____.

A)political pressure from special interests pushes government to expand
B)special interests get whatever they want
C)special interests do not get what they want under Incrementalism
D)the general public general can apply more pressure than special interests and thus will move the budget in drastic ways,depending upon public sentiment

Question 6

Agencies budgetary requests will be excessively large because _____.

A)demand for government services is always increasing
B)they want to make the President happy
C)they know that their final budget will be smaller than their requests
D)of logrolling

Question 7

The primary problem with entitlements,from a budgetary perspective,is that _____.

A)expenditures are much harder to control than for non-entitlements
B)they add to the uncertainty of the budgetary process because it is difficult to predict how many individuals will be eligible
C)it is impossible to control spending on entitlements once created
D)a and b
E)all of the above

Question 8

The primary reason the federal budgeting process changed in 1921 was that _____.

A)the level of government expenditures were increasing
B)the President wanted more power
C)federal agencies wanted less responsibility
D)World War II forced the military to get involved

Question 9

Prior to 1921,federal agencies first submitted their budgetary requests to _____.

A)the President
B)the Speaker of the House
C)the Congressional Budget Office
D)the Treasury Department

Question 10

In 2000,about what percentage of federal expenditures were off budget?

A)1.1
B)14.1
C)19.3
D)22.2

Question 11

Responsibility for developing the President's budget lies with _____.

A)the Congressional Budget Office
B)the Treasury Department
C)the Council of Economic Advisers
D)the Office of Management and Budget

Question 12

Incrementalism describes the notion that _____

A)an agency's budget increases a small amount each year
B)only one or two new programs are added to the budget every year
C)government employees should only receive a cost-of-living adjustment annually
D)government is slow to act because it is politically difficult to do so

Question 13

Incrementalism may be an efficient way to craft a budget because _____.

A)it minimizes government size
B)it is difficult to measure the benefits of many government programs
C)it removes special interest influence from the budget process
D)it requires that programs be cost-effective to continue

Question 14

Which of the following is not a reason for changes in the politics of the budget process over the past forty years?

A)The changing composition of government spending toward social services.
B)The increasing size of budget deficits.
C)The increasing federal debt.
D)The move away from incrementalism in the budgetary process.

Question 15

The primary distinction between an expenditure that is on budget and an expenditure that is off budget is _____.

A)that all off-budget expenditures are entitlements
B)that all on-budget expenditures are public goods or quasi-public goods
C)that Congress has determined the expenditures should be on budget or off budget
D)a and b

Question 16

Entitlements are government programs for which _____.

A)funds are provided for those who meet the eligibility requirements
B)funds are appropriated to an agency in one lump sum
C)social services are provided
D)b and c

Question 17

_____ has the primary responsibility for developing the early stages of the government's budget.

A)The executive branch
B)The Treasury Department
C)The House of Representatives
D)The Senate

Question 18

The fact that the incremental annual increase in budgets varies considerably by department suggests that _____.

A)popular programs get more funding that unpopular programs
B)incrementalism is not a complete theory of the government budget process
C)special interest influence is constant
D)a and b

Question 19

When Congress does not pass the necessary budget resolutions by the time the new fiscal year starts,they need to pass a ______ in order to keep agencies operating.

A)budgetary extension
B)continuing resolution
C)continuing extension
D)emergency budgetary declaration

Question 20

_____ helps Congress evaluate the president's budget.

A)The Treasury Department
B)The Office of Management and Budget
C)The Congressional Budget Office
D)The Joint Economic Committee

Question 21

Line item budgets _____.

A)do not provide any insight into the effectiveness of expenditures
B)are good for evaluating the effectiveness of programs
C)allow expenditures to change gradually over time
D)give insight into overall trends in agency expenditures

Question 22

When all costs and benefits in a cost-benefit analysis do not occur at the same point in time,a discount rate is used to _____.

A)reduce the future costs and benefits relative to current costs and benefits
B)increase future costs and benefits relative to current costs and benefits
C)increase current costs relative to future benefits
D)reduce future costs relative to current costs

Question 23

A line item budget _____.

A)groups expenditures by congressional district
B)groups expenditures by the goals they are trying to achieve
C)groups expenditures by the types of items that are purchased
D)groups expenditures by special interest

Question 24

A negative cost-benefit ratio means that a program should not be undertaken.

Question 25

The appropriate discount rate should not be adjusted for _____.

A)inflation
B)risk of default
C)taxes on interest
D)a and c

Question 26

Budgets should be organized along line item budgets rather than program budgets in order to facilitate an evaluation of the effectiveness of government spending on an issue.

Question 27

The President first began submitting a budget to Congress in 1931,during the Great Depression.

Question 28

The benefits to a program are more difficult to quantify in dollar terms that the costs to a program.

Question 29

The optimal size of a project is _____.

A)the one that produces the highest net benefits
B)the one that has the highest ratio of benefits to costs
C)the one where the distance between marginal benefits and marginal costs is greatest
D)a and c

Question 30

The U.S.Postal Service expenditures are off-budget.

Question 31

One reason why the spending side of the budget is more susceptible to special interests than the tax side is because _____.

A)spending can be allocated geographically,but taxation cannot
B)tax programs are largely determined by the Internal Revenue Service,not Congress
C)people do not care about taxation
D)the administrative costs of spending programs are lower,making change cheaper

Question 32

A program budget ______.

A)increases the budget of an agency by the annual inflation rate
B)groups expenditures by the goals they are trying to achieve
C)groups expenditures by the types of items that are purchased
D)groups expenditures by agency

Question 33

One of the drawbacks of cost-benefit analysis is that it _____.

A)attempts to add up both the costs and the benefits
B)is not compatible with utilitarianism
C)cannot adjust for spending at different points in time
D)focuses on total costs and benefits

Question 34

Off-budget expenditures are a recent phenomenon,originating during World War I.

Question 35

The lower the discount rate,the higher the present value of a proposed project.

Question 36

Once the President submits his budget to Congress,there is little that the members of the House and Senate can do to change the budget.

Question 37

From a normative perspective,the role of the budgeting process is to allocate scarce resources to their most highly valued uses.

Question 38

A positive cost-benefit ration implies that the activity or program should be undertaken.

Question 39

Which of the following is not a step involved in cost-benefit analysis?

A)Conversion of the costs and benefits to dollar terms.
B)Enumeration of the costs and benefits.
C)Enumeration of the special interests.
D)Enumeration of the options.

Question 40

Cost-benefit analysis is just a guide to making a normative decision.

Question 41

Define incrementalism and give two reasons why incrementalism might be efficient.

Question 42

Spending tends to be more susceptible to special interests than taxation.

Question 43

What are entitlements? How has the increase in the number of entitlements changed the budgetary process?

Question 44

The longer the time horizon of a project,the more important choosing the right discount rate is.

Question 45

Describe the role of the President in the budgetary process prior to 1921 and the President's role in the budgetary process after 1921.Explain why this change in process might have made sense.

Question 46

List three possible problems that could occur when undertaking cost-benefit analysis.

Question 47

What is the difference between a program budget and a line-item budget? Is one more valuable to evaluating the effectiveness of government expenditures? Why?

Question 48

What is cost-benefit analysis? Describe the process of cost-benefit analysis.