AnswersIL-EconomicsFiscal Policy: Spending

Fiscal Policy: Spending Answers

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1
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A diagram shows that taxes go into the government, which then go into spending.

Question illustration
A
Government Spending
B
The National Economy
C
The Federal Debt
D
Fiscal Policy
2
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A plan for spending money that balances income with spending and shows how money will be spent is

A
a surplus.
B
an expenditure.
C
a budget.
D
a deficit.
3

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.
4

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.
5

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.
6

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.

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A
half of GDP.
B
100 percent of GDP.
C
one quarter of GDP.
D
one tenth of GDP.
7

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.

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A
1980 to 1990
B
1980 to 2000
C
1990 to 2000
D
2000 to 2010
8

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
9

Revenue and expenditures are sitting on a balance. Expenditures are lower than revenue.

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A
a budget surplus
B
a budget deficit
C
a balanced budget
D
a plan to balance the budget
10

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.

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A
labor and transportation
B
veterans' affairs
C
education/health and human services
D
international assistance

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