CHAPTER 48
Government Spending and Taxes
MULTIPLE CHOICE
536. Which of the following is an example of a government transfer payment?
a. unemployment compensation.
b. military spending.
c. spending by state and local governments on roads.
d. spending in excess of current tax revenues.
537. Government spending that is the result of previously enacted policies and laws such as
Social Security and unemployment compensation is called
a. discretionary fiscal policy
b. automatic fiscal policy
c. continuous fiscal policy.
d. imbedded fiscal policy.
538. If federal government revenues (primarily taxes) are greater than total government outlays,
then the federal government budget
a. has a surplus
b. has a deficit
c. is balanced
d. has a capital gain.
539. Assume that the federal government collected $2,407 billion in revenues in 2006, and total
outlays were $2,655 billion.
a. there was a surplus of $248 billion in 2006
b. there was a deficit of $248 billion in 2006
c. the government debt in 2006 was $248 billion
d. government transfers in 2006 were $248 billion
540. During expansionary periods in peacetime, we can expect
a. revenues to increase.
b. government spending to fall
c. revenues to fall
d. deficits to rise.
541. During expansionary period in peacetime, we can expect
a. revenues to fall
b. government spending to rise
c. deficits to rise
d. government spending to fall.
542. The federal law providing for benefits for the unemployed
a. was passed
b. in the 1960s
c. in the 1930s
d. in the 1980s
e. there is no federal law providing unemployment compensation.
543. Every year the President and Congress decide on spending for various programs. This type
of spending is called
a. deficit spending
b. discretionary spending
c. automatic spending.
d. transfer payments.
544.
a. one that is proposed by a progressive economist.
b. one in which the percentage rises as the level of income rises.
c. one in which the amount rises as the level of consumption rises.
d. one in which the percentage rises as the level of wealth rises.
545. Andrew purchased 1000 shares of stock for $25,000 in 1987. In 1997 he sold these 1000
shares for $72,000. Andrew has experienced
a. a capital gain
b. a capital loss.
c. an increase in earned income.
d. a gain or a loss depending on the rate of inflation.
546.
a. one that will expire after 10 years
b. one in which the percentage falls as the level of income rises.
c. one in which the amount falls as the level of consumption rises.
d. one in which the percentage remains the same, but the amount rises with income.