Question 1

Which of the following is true?
A)Real federal spending per person was approximately 50 times higher in 1900 than 1800.
B)Real federal spending per person was approximately 80 times higher in 2010 than 1916.
C)Real federal spending per person grew slowly under the Reagan Administration during the 1980s, but it increased rapidly under the Clinton administration in the 1990s.
D)In recent years, government expenditures at the state and local levels have been greater than government spending at the federal level.

Accepted Answer

According to historical data, real federal spending per person was approximately 80 times higher in 2010 than in 1916. This shows a significant increase in government spending over time. The other options are not supported by historical data.

Question 2

Compared to the situation prior to 1980, the top marginal personal income tax rate imposed on the rich is now substantially
A)lower and so is the share of the revenue collected from them.
B)higher and so is the share of the revenue collected from them.
C)lower, but the share of the revenue collected from them is now higher.
D)higher, but the share of the revenue collected from them is now lower.

Accepted Answer

C

Question 3

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for
A)less than 20 percent of federal spending.
B)about 40 percent of federal spending.
C)approximately 50 percent of federal spending.
D)more than 85 percent of federal spending.

Accepted Answer

D

Question 4

In 1960, spending on income transfers and health care accounted for 21.5 percent of the federal budget. In 2010, these two items accounted for
A)less than 15 percent of the federal budget.
B)approximately 25 percent of the federal budget.
C)approximately 32 percent of the federal budget.
D)approximately 62 percent of the federal budget.

Accepted Answer

The answer of In 1960, spending on income transfers and...

Question 5

Real (adjusted for inflation) federal spending per person in the United States
A)has increased by approximately 10 percent per decade during the last 225 years.
B)increased more rapidly during the nineteenth century than during the twentieth century.
C)in 2010 was approximately 80 times the level of 1916.
D)increased rapidly during the first half of the twentieth century but has changed very little since 1950.

Accepted Answer

According to the statement, real federal spending per person in the United States in 2010 was approximately 80 times the level of 1916. This means that federal spending has increased significantly over the years, but not necessarily at a constant rate or consistently between centuries.

Question 6

During the last four decades, defense expenditures have
A)accounted for approximately one-half of federal expenditures.
B)accounted for less than 10 percent of federal expenditures.
C)been increasing as a share of federal expenditures.
D)been declining as a share of federal expenditures.

Accepted Answer

Defense expenditures have been declining as a share of federal expenditures during the last four decades.

Question 7

During the first 125 years of the United States,
A)there were no constitutional constraints on the spending of the federal government.
B)real spending per person by the federal government rose by a factor of 60.
C)most of the government spending was undertaken at the state and local levels.
D)most of the government spending was undertaken at the federal level.

Accepted Answer

During the first 125 years of the United States, most of the government spending was undertaken at the state and local levels. The federal government's role was primarily limited to national defense, foreign relations, and maintaining law and order, with very little involvement in domestic policy or spending. There were also no constitutional constraints on the spending of the federal government during this time. It wasn't until the early 20th century that federal spending began to increase significantly and the government began to take on a larger role in domestic policy.

Question 8

As the size of government increases as a share of the economy,
A)the burden of deadweight losses of taxation generally diminishes.
B)the rate of return derived from projects undertaken by the government will tend to increase.
C)the government generally becomes more heavily involved in unproductive and even counterproductive activities.
D)the activities of government are generally limited to protective functions such as public safety , national defense, and provision of a limited set of public goods.

Accepted Answer

As the size of government increases, it tends to become more bureaucratic and involved in activities that may be unproductive or even counterproductive, leading to a decrease in efficiency and effectiveness. This is due to various factors such as rent-seeking, increased regulatory burden, and difficulty in coordinating large-scale projects.

Question 9

Measured as a share of the economy, government spending
A)has been between 10 and 15 percent of the U.S. economy since 1930.
B)has been between 20 and 25 percent of the U.S. economy since 1930.
C)rose from less than 10 percent in 1929 to over 35 percent in 2010.
D)declined from more than 50 percent in 1929 to approximately 25 percent in 2010.

Accepted Answer

The answer of Measured as a share of the economy,...

Question 10

Measured as a share of the economy, government expenditures on ____ have declined during the last four decades.
A)health care
B)national defense
C)transfer payments
D)Social Security benefits

Accepted Answer

According to data from the Office of Management and Budget, government expenditures on national defense as a share of GDP have declined from a high of 9.4% in 1968 to 3.3% in 2019. The other options (health care, transfer payments, Social Security benefits) have all increased as a share of GDP during the same time period.

Question 11

Government expenditures for Social Security and unemployment benefits are examples of
A)government consumption.
B)government investment.
C)government purchases.
D)transfer payments.

Accepted Answer

Social Security and unemployment benefits are transfer payments, as they transfer money directly from the government to individuals or households without any goods or services being produced or purchased.

Question 12

Between 1960 and 2010, the share of federal spending allocated to national defense
A)declined sharply, while the share allocated to health care increased substantially.
B)rose sharply, while the share allocated to health care declined substantially.
C)was relatively constant, while the share allocated to health care declined modestly.
D)declined modestly, while the share allocated to health care was relatively constant.

Accepted Answer

The answer of Between 1960 and 2010, the share of...

Question 13

Government expenditures as a share of the U.S. economy are
A)the largest in the world.
B)the smallest in the world.
C)smaller than most Western European countries but larger than a number of high-growth Asian economies.
D)larger than Canada, France, and the United Kingdom but slightly smaller than Germany and Italy.

Accepted Answer

The U.S. has a smaller government expenditure as a share of the economy compared to most Western European countries, but larger than a number of high-growth Asian economies.

Question 14

In 2010, spending on four items-income transfers (including Social Security), health care, national defense, and interest on the national debt-accounted for
A)approximately 25 percent of federal spending.
B)approximately 40 percent of federal spending.
C)slightly more than 50 percent of federal spending.
D)approximately 88 percent of federal spending.

Accepted Answer

The answer of In 2010, spending on four items-income transfers...

Question 15

What percentage of the total government expenditures of the United States is undertaken at the federal level?
A)approximately 20 percent
B)approximately 40 percent
C)approximately 60 percent
D)approximately 80 percent

Accepted Answer

The answer of What percentage of the total government expenditures...

Question 16

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?
A)one dollar
B)less than one dollar because the administration of and compliance with the tax laws creates jobs for people
C)more than a dollar because collection of the taxes requires resources that would otherwise be available for private sector production
D)more than a dollar because of the excess burden resulting from the elimination of productive exchanges by the taxes
E)Both c and d are correct.

Accepted Answer

The answer of How much does it cost to tax...

Question 17

Total government spending (federal, state, and local) sums to approximately
A)10 percent of the U.S. economy.
B)20 percent of the U.S. economy.
C)40 percent of the U.S. economy.
D)50 percent of the U.S. economy.

Accepted Answer

According to data from the Bureau of Economic Analysis, total government spending in the United States in 2020 amounted to approximately 38.9 percent of the gross domestic product (GDP). This includes federal, state, and local government expenditures. Therefore, the best choice is C, which states that government spending sums to approximately 40 percent of the U.S. economy.

Question 18

During the last four decades, the composition of federal spending has
A)been virtually unchanged, but federal spending as a share of GDP has declined substantially.
B)been virtually unchanged, but federal spending as a share of GDP has increased sharply.
C)shifted away from national defense and toward spending on income transfers and health care.
D)shifted away from health care and income transfers and toward spending on national defense.

Accepted Answer

Over the last four decades, federal spending has shifted away from national defense and toward spending on income transfers and health care. The share of federal spending on income transfers such as Social Security, Medicare, and Medicaid has increased, as has the share of spending on health care. Meanwhile, the share of federal spending on national defense has declined.

Question 19

Which of the following is true?
A)In 1916, the per person real government expenditures were approximately 60 times greater than in 1800.
B)Prior to 1929, government expenditures at the state and local levels were substantially smaller than federal expenditures.
C)Real federal spending per person was approximately 80 times greater in 2010 than in 1916.
D)All of the above are true.

Accepted Answer

The statement in option A is true according to historical data. The statement in option B is false, as state and local expenditures were actually larger than federal expenditures prior to 1929. The statement in option C is also true, based on data comparing real federal spending per person in the two years. Therefore, only option C is the correct answer.

Question 20

Compared to the situation during the first 125 years of the United States (1790-1915), today total government expenditures are ____ share of the economy, and a greater proportion of those expenditures take place at the ____ level(s).
A)a smaller; federal
B)about the same; federal
C)a larger; federal
D)a larger; state and local

Accepted Answer

Total government expenditures as a share of the economy have increased over time, meaning that they are now a larger share than they were during the first 125 years of the United States. Additionally, a greater proportion of government expenditures now take place at the federal level as opposed to state and local levels.

Quiz 16: Appendix: Government Spending and Taxation

Which of the following is true?

Compared to the situation prior to 1980, the top marginal personal income tax rate imposed on the rich is now substantially

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for

In 1960, spending on income transfers and health care accounted for 21.5 percent of the federal budget. In 2010, these two items accounted for

Real (adjusted for inflation) federal spending per person in the United States

During the last four decades, defense expenditures have

During the first 125 years of the United States,

As the size of government increases as a share of the economy,

Measured as a share of the economy, government spending

Measured as a share of the economy, government expenditures on ____ have declined during the last four decades.

Government expenditures for Social Security and unemployment benefits are examples of

Between 1960 and 2010, the share of federal spending allocated to national defense

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

In 2010, spending on four items-income transfers (including Social Security) , health care, national defense, and interest on the national debt-accounted for

What percentage of the total government expenditures of the United States is undertaken at the federal level?

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

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

During the last four decades, the composition of federal spending has

Which of the following is true?

Compared to the situation during the first 125 years of the United States (1790-1915) , today total government expenditures are share of the economy, and a greater proportion of those expenditures take place at the level(s) .

Quiz 16: Appendix: Government Spending and Taxation

Which of the following is true?

Compared to the situation prior to 1980, the top marginal personal income tax rate imposed on the rich is now substantially

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for

In 1960, spending on income transfers and health care accounted for 21.5 percent of the federal budget. In 2010, these two items accounted for

Real (adjusted for inflation) federal spending per person in the United States

During the last four decades, defense expenditures have

During the first 125 years of the United States,

As the size of government increases as a share of the economy,

Measured as a share of the economy, government spending

Measured as a share of the economy, government expenditures on ____ have declined during the last four decades.

Government expenditures for Social Security and unemployment benefits are examples of

Between 1960 and 2010, the share of federal spending allocated to national defense

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

In 2010, spending on four items-income transfers (including Social Security) , health care, national defense, and interest on the national debt-accounted for

What percentage of the total government expenditures of the United States is undertaken at the federal level?

How much does it cost to tax a dollar of revenue away from the private sector and transfer it to the government to finance a government program?

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

During the last four decades, the composition of federal spending has

Which of the following is true?

Compared to the situation during the first 125 years of the United States (1790-1915) , today total government expenditures are ____ share of the economy, and a greater proportion of those expenditures take place at the ____ level(s) .

Compared to the situation during the first 125 years of the United States (1790-1915) , today total government expenditures are share of the economy, and a greater proportion of those expenditures take place at the level(s) .