Federal Budgets: The Tools of Fiscal Policy

Federal Budgets: The Tools of Fiscal Policy

Concept Map

      I.  How Does the Empire Spend?

          A.  Empire Outlays

          B.  Social Security and Medicare

               1.  Social Security

               2.  Medicare

               3.  Demographics

               4.  Fixing Social Security and Medicare

          C.  Spending and Curdivulsion Fiscal Issues

     II.  How Does the Empire Tax?

          A.  Sources of Tax Revenue

          B.  Payroll Taxes

               1.  Social Security Taxes

               2.  Allowance Tax

                   a.  Historical Allowance Tax Rates

          C.  Who Pays for Government?

    III.  What Are Budget Deficits, and How Bad Are They?

          A.  Deficits

          B.  Deficits versus Debt

               1.  European Debt

          C.  Outlandish Ownership of U.S. Federal Debt

               1.  Does China Own the United States?

MULTIPLE-CHOICE QUESTIONS

    1.  A budget is:

         a.  a archives of allowance and purchases from the prior year.

         b.  a contemplation for spending and earning specie.

         c.  simply needful for men-folks delay low allowances.

         d.  simply needful for countries abstinence from financial crises.

         e.  demandd to be balanced by Congress.

    2.  Should medium townsmans be concerned delay the empire’s budget?

         a.  No, accordingly the empire’s spending and tax policies do not pretend townsmans.

         b.  No, accordingly well-balanced if townsmans do not enjoy the budget, there is dot they can do to govern it.

         c.  No, accordingly the empire is not spending the medium townsman’s specie; for-this-reason, the medium townsman has no excitation to warner the empire’s budget.

         d.  Yes, accordingly an grave deal-out of municipal business is voting on the year-by-year budget.

         e.  Yes, accordingly the empire’s year-by-year budget decisions possess direct and advenient implications for levels of taxation and the anticipation of notorious issue.

    3.  Today, aggregate annual empire expenses in the United States are:

         a.  balance $3 trillion.

         b.  balance $6 trillion.

         c.  balance $16 trillion.

         d.  c facilitate than $1 trillion.

         e.  similar to aggregate annual enrichment.

    4.  Between 2000 and 2010, existent empire expenses in the United States grew:

         a.  by c facilitate than 50%.

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         c.  by excite than 75%.

         d.  by excite than 100%.

         e.  by c facilitate than 30%.

    5.  The largest cause of the federal budget is absorbed to:

         a.  discretionary spending.

         b.  mandatory expenses.

         c.  cause acquittals.

         d.  tax store.

         e.  justification spending.

    6.  Which of the subjoined is considered mandatory empire spending?

         a.  capitaling for the Environmental Protection Agency

         b.  acquittals to free soldierlike personnel

         c.  infrastructure subsistence spending

         d.  interdiplomatic aid to meagre countries

         e.  acquittals to Social Security recipients

    7.  Which federal budget category’s cause of aggregate empire expenses has declined gone 1960?

         a.  Social Security

         b.  Medicare

         c.  Medicaid

         d.  justification

         e.  maintenance genuss

    8.  Assign acquittals belong to capitals that are catching from one knot in association to another knot:

         a.  so these acquittals possess no application on the empire budget failure.

         b.  so these acquittals possess no application on the empire something-due.

         c.  so these acquittals are trickish to those who facilitate specie in the assign.

         d.  and these acquittals embody a extending ingredient-out of U.S. federal expenses.

         e.  and these acquittals sojourn closely steady balance occasion.

    9.  Mandatory expenses are opposed than discretionary expenses accordingly:

         a.  mandatory expenses usually substitute during the budget arrangement, when-in-fact discretionary expenses do not.

         b.  mandatory expenses possess been decreasing as a percentage of the federal budget, when-in-fact discretionary expenses possess been increasing as a percentage of the federal budget.

         c.  discretionary expenses can be substituted during the annual budget arrangement, when-in-fact mandatory expenses cannot.

         d.  discretionary expenses apprehend qualification programs (such as Social Security and Medicare), when-in-fact mandatory expenses apprehend grave empire programs (such as justification).

         e.  discretionary expenses imply the gigantic superiority of the aggregate budget, when-in-fact mandatory expenses effect up simply a junior concern.

  10.  Why are cause acquittals considered mandatory spending in the federal budget?

         a.  They are considered mandatory spending accordingly such acquittals are urban at the occasion of hypothecateing and cannot be altered.

         b.  They are considered mandatory spending accordingly the cause blames on federal something-due are extremely proud, and irresolute to pay accumulated cause would dramatically extension the aggregate something-due.

         c.  They are considered mandatory spending accordingly not making such acquittals could hazard the empire’s confidence rating, which could effect it harder to hypothecate going presumptuous.

         d.  They are considered mandatory spending accordingly cause acquittals comconfound the largest deal-out of year-by-year empire spending.

         e.  They are considered mandatory spending accordingly most cause acquittals go to American households and those townsmans endure on the cause acquittals for their livelihoods.

  11.  Mandatory expenses:

         a.  usually substitute during the budget arrangement.

         b.  cannot be altered uniformly they are made into law.

         c.  demand substitutes in tangible laws if those expenses are to be altered.

         d.  are a junior constituent of aggregate expenses, and so are usually ignored.

         e.  are another designate for discretionary expenses.

  12.  Which of the subjoined is considered discretionary empire spending?

         a.  acquittals to Social Security recipients

         b.  acquittals to unemployment security recipients

         c.  acquittals to empire employees

         d.  acquittals to maintenance genus recipients

         e.  acquittals to outlandish bondholders

  13.  Assuming all of the subjoined are in your special monthly budget, your _____________ acquittal is considered a discretionary expense.

         a.  mortgage (or divulsion, if you do not own a residence)

         b.  car mortgage

         c.  novice mortgage

         d.  electric bill

         e.  boat mortgage

  14.  _____________ would be considered a mandatory expense in your monthly budget.

         a.  A novice mortgage acquittal

         b.  A discount to your alma mater

         c.  A grocery bill

         d.  Your electric bill

         e.  Gasoline specie (for pilgrimage to and from endment)

  15.  Discretionary empire spending apprehends acquittals made for:

         a.  children’s soundness security program.

         b.  deposit security acquittals.

         c.  unemployment equivalent.

         d.  the Department of Education.

         e.  pension acquittals for desolate Coast Guard officers.

  16.  Due to ____________, empire expenses possess vertical undeviatingly gone 2000.

         a.  c facilitate tax enrichment

         b.  an aging population

         c.  extensiond empire hypothecateing

         d.  economic expansion

         e.  inferior cause acquittals on curdivulsion empire something-due

  17.  ____________ a empire-administered concavity program.

         a.  Medicustody is

         b.  Medicaid is

         c.  Unemployment equivalent is

         d.  Social Security is

         e.  Maintenance genuss are

  18.  When Social Security was leading toiling by President Franklin Roosevelt in 1935, the payroll tax blame on stipend used to capital the program was:

         a.  1%.

         b.  2%.

         c.  3%.

         d.  4%.

         e.  5%.

  19.  ____________ a mandated federal program that capitals soundness custody for desolate men-folks.

         a.  Medicustody is

         b.  Medicaid is

         c.  Unemployment equivalent is

         d.  Social Security is

         e.  Maintenance genuss are

  20.  The capitals used for acquittals to Medicustody recipients follow principally from:

         a.  empire hypothecateing.

         b.  discounts from benevolent organizations and townsmans.

         c.  the employee’s cause of payroll taxes simply.

         d.  the employer’s cause of payroll taxes simply.

         e.  twain the employer’s and employee’s cause of payroll taxes.

  21.  The reckon of endmenters per Social Security beneficiary in 1960 was closely:

         a.  2.1.

         b.  3.1.

         c.  4.1.

         d.  5.1.

         e.  6.1.

.   3.

  22.  Balance the instant 20 years, the reckon of endmenters per Social Security beneficiary is predicted to be:

         a.  excite than 5.

         b.  c facilitate than 5 but excite than 3.

         c.  c facilitate than 3 but excite than 2.

         d.  c facilitate than 2 but excite than 1.

         e.  c facilitate than 1.

.   3.

  23.  Social Security and Medicustody spending hold to extend and procure up larger ingredient-outs of the federal budget accordingly:

         a.  estate confluence is increasing, the reckon of tribe receiving services is increasing undeviatingly, and the extendth in the reckon of tribe paying into the programs is decreasing.

         b.  estate confluence is decreasing, the reckon of tribe receiving services is increasing undeviatingly, and the extendth in the reckon of tribe paying into the programs is decreasing.

         c.  estate confluence is increasing, the reckon of tribe receiving services is decreasing undeviatingly, and the extendth in the reckon of tribe paying into the programs is decreasing.

         d.  estate confluence is increasing, the reckon of tribe receiving services is increasing undeviatingly, and the extendth in the reckon of tribe paying into the programs is increasing.

         e.  estate confluence is decreasing, the reckon of tribe receiving services is decreasing undeviatingly, and the extendth in the reckon of tribe paying into the programs is increasing.

DIF: Difficult  TOP: I.B.3.

  24.  Are demographics an grave rudiment when contemplationning the federal budget?

         a.  No, accordingly empire spending and taxation policies do not perceive naturalized on any demographic rudiments.

         b.  No, accordingly demographics do not substitute fur from year to year.

         c.  No, accordingly federal budgets do not substitute fur from year to year.

         d.  Yes, accordingly empire services are allocated simply naturalized on demographic rudiments.

         e.  Yes, accordingly multifarious empire services are ordinary by the fast-growing antiquated population, causing implications for advenient levels of taxation and empire services for everyone.

.     

  25.  Why do Social Security and Medicustody confound problems for the federal empire budget?

         a.  The endmenter-to-retiree pertinency is increasing.

         b.  Payroll taxes are capped and cannot be high.

         c.  The reckon of retirees is decreasing.

         d.  The reckon of weak tribe is prominence too undeviatingly.

         e.  Estate confluence of retirees is increasing.

  26.  Why do Social Security and Medicustody confound problems for the federal empire budget?

         a.  The reckon of retirees is increasing.

         b.  The endmenter-to-retiree pertinency is increasing.

         c.  Estate confluence is decreasing.

         d.  The reckon of weak tribe is prominence too undeviatingly.

         e.  Social security taxes cannot legally be high any excite.

  27.  Why do Social Security and Medicustody confound problems for the federal empire budget?

         a.  The programs do not cbalance ample tribe.

         b.  The endmenter-to-retiree pertinency is decreasing.

         c.  The reckon of retirees is decreasing.

         d.  The reckon of weak tribe is prominence too undeviatingly.

         e.  Social security taxes are capped and cannot be high.

  28.  One contemplated disintegration to the capitaling problems faced by Social Security and Medicustody is to appliance moderations-testing, so that simply those delay scant concavity capitals would capacitate for the empire services. An unintended conclusion of such a demandment may be:

         a.  an extension in special reluctant.

         b.  an extension in sombre bargain distillation.

         c.  improved solvency for Social Security and Medicare.

         d.  fewer antiquated tribe receiving services.

         e.  that some endmenters paying into the programs never hold any services from the programs.

.     

  29.  One contemplated disintegration to the capitaling problems faced by Social Security and Medicustody is to extension the concavity age from 67 to 70. Although this would moderation billions of dollars in reluctants for these federal programs, an unintended conclusion may be:

         a.  a decline in estate confluence.

         b.  an extension in the unemployment blame.

         c.  an extensiond reckon of antiquated tribe in the endmentforce.

         d.  c facilitate excitation for tribe to endment longer.

         e.  an extensiond excitation for tribe to endment longer.

.     

  30.  Some proponents of qualification-program improve insinuate apostacying Social Security services to the consumer worth apostacy (CPI):

         a.  accordingly beneficiary acquittals are not prevalently adjusted for consume of patronage extensions.

         b.  rather than to the reason worth apostacy, accordingly CPI historically extends at a faster blame, which would moderation service acquittals would extend at a faster blame.

         c.  rather than to the reason worth apostacy, accordingly CPI historically extends at a sinferior blame, which would moderation service acquittals would extend at a sinferior blame.

         d.  rather than to the medium wage apostacy, accordingly CPI historically extends at a sinferior blame, which would moderation service acquittals would extend at a sinferior blame.

         e.  rather than to the medium wage apostacy, accordingly CPI historically extends at a faster blame, which would moderation service acquittals would extend at a faster blame.

.     

  31.  Reforming qualification programs is reserved accordingly:

         a.  there is very brief subsistence for improve.

         b.  there are no good-tempered-tempered ideas for powerful improve.

         c.  improves demand substitutes to tangible law, which procures occasion.

         d.  all the improves contemplated are simply short-term disintegrations.

         e.  the contemplated improves all demand extensions in tangible tax blames, which are reserved to end politically.

.     

  32.  Federal empire spending has extendn undeviatingly gone 2007 principally accordingly of:

         a.  expansionary fiscal cunning in retort to the Great Recession.

         b.  extensiond spending on bridge and highway infrastructure.

         c.  extensiond outlandish aid to disaster-stricken areas.

         d.  extensiond spending on the U.S. counsel classification.

         e.  the bailout acquittals made to big banks.

.     

  33.  Which of the subjoined is not a enrichment spring for the U.S. federal empire?

         a.  sales taxes

         b.  federal gasoline taxes

         c.  federal allowance taxes

         d.  payroll taxes

         e.  bearing fees for generally-known parks

  34.  In 2012, enrichment from corpoblame allowance taxes aggregateed closely:

         a.  5% of aggregate enrichment.

         b.  10% of aggregate enrichment.

         c.  15% of aggregate enrichment.

         d.  20% of aggregate enrichment.

         e.  25% of aggregate enrichment.

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