Fiscal Policy: Spending Answers

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

1

1980 to 1990

1

1980 to 2000

1

1990 to 2000

2

2000 to 2010

2

Free Preview

When revenues are higher than expenditures in a budget, that budget

A

shows a deficit.

B

is in balance.

C

must be discarded.

D

shows a surplus.

3

A graph shows the Total Public Debt of the U S Government from 1993 to 2013 with Year on the x-axis and Total public debt in trillions of U S dollars on the y-axis, from 0 to 20 in increments of 5. The debt stays constant from 1993 to 2001 and then steadily increases.

A

It is increasing.

B

It has leveled off.

C

It is decreasing.

D

It has not changed.

4

Which statement best describes the likely effects of an expansionary fiscal policy?

I

It can increase interest rates and unemployment, but lower inflation.

I

It can increase interest rates, unemployment and inflation.

I

It can reduce interest rates and inflation, but increase unemployment.

I

It can reduce interest rates and unemployment, but increase inflation.

5

A graph titled Total U S Government Spending as Percentage of G D P from 1990-2012 has year on the x-axis and percentage of G D P on the y-axis, from 15 to 30 percent in increments of 5. The percentage of G D P is lowest at 18 percent in 2001 and highest at 25 percent in 2009.

h

half of GDP.

1

100 percent of GDP.

o

one quarter of GDP.

o

one tenth of GDP.

6

Revenue and expenditures are sitting on a balance at the same level.

A

unbalanced

B

balanced

C

deficit

D

surplus

7

Spending that is required by law is known as

d

discretionary spending.

d

deficit spending.

m

mandatory spending.

e

expansionary spending.

8

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

A

Federal law requires the budget to be balanced.

B

Politicians do a good job in balancing the budget.

C

In most years, the federal budget shows a surplus.

D

Lines seldom overlap showing a mostly unbalanced budget.

9

What is the main goal in creating the federal budget?

A

managing businesses and increasing spending on all programs

B

deciding how to manage the government’s tax revenue and expenditures

C

finding a way to allow the economy to run on its own

D

finding a way to slow down rapid economic growth

10

When a government creates a budget, it is seeking a way to

s

spend as much revenue as possible.

c

cut spending to a bare minimum.

r

return as much money to taxpayers as possible.

a

allocate money to programs and projects.

11

Which of the following statements most accurately describes the federal government and its employees?

A

Millions of Americans work for the federal government.

B

The federal government is not allowed to hire employees.

C

The majority of Americans are employed by the federal government.

D

The number of federal employees is too small to affect government spending.

12

What does deficit spending require a government to do?

A

lay off workers

B

cut taxes

C

take on debt

D

hire more workers

13

A pie chart titled Federal Government Spending in 2010 is shown. Education and health and human services has the largest piece, and veteran apostrophe s affairs has the smallest piece.

A

labor and transportation

B

veterans' affairs

C

education/health and human services

D

international assistance

14

Which of these effects of expansionary spending would a government most want to avoid?

A

higher employment

B

higher inflation

C

growth in production

D

growth in consumer spending

15

What is the main goal in creating the federal budget?

A

managing businesses and increasing spending on all programs

B

deciding how to manage the government’s tax revenue and expenditures

C

finding a way to allow the economy to run on its own

D

finding a way to slow down rapid economic growth

16

Gino is writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.How does the policy that Gino is describing most likely affect interest rates and unemployment?

A

The policy would most likely increase interest rates and unemployment.

B

The policy would most likely decrease interest rates and unemployment.

C

The policy would most likely increase unemployment but decrease interest rates.

D

The policy would most likely increase interest rates but decrease unemployment.

17

A diagram shows that taxes go into the government, which then go into spending.

A

Government Spending

B

The National Economy

C

The Federal Debt

D

Fiscal Policy

18

A graph shows the U S Government and Expenditures from 1980 to 2010. The money spent and money received generally follow the same trend, but around 2008, the amount of money spent increased and money received decreased.

A

1980 to 1990

B

1980 to 2000

C

1990 to 2000

D

2000 to 2010

19

A graph titled Total U S Government Spending as Percentage of G D P from 1990-2012 has year on the x-axis and percentage of G D P on the y-axis, from 15 to 30 percent in increments of 5. The percentage of G D P is lowest at 18 percent in 2001 and highest at 25 percent in 2009.

A

half of GDP.

B

100 percent of GDP.

C

one quarter of GDP.

D

one tenth of GDP.

20

"Meeting the spending targets in this budget meant some very difficult choices."President Barack Obama,2012 Budget Message of the President

A

deciding which country to borrow from to finance spending

B

deciding what would be funded and what would be cut

C

deciding how to keep interest rates low on the national debt

D

deciding how much to increase tax rates

Fiscal Policy: Spending Answers

More from this Course

TRY EDGENUITY HACKS