Fiscal Policy: Taxes Answers

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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
2
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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.
3

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.
4

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.
5

When governments inject money into the economy, which of the following are their goals? Check all that apply.reducing unemploymentimproving economic stabilityencouraging competitionlaying off striking workersimproving production

A
reducing unemployment
B
improving economic stability
C
encouraging competition
D
laying off striking workers
E
improving production
6

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
7

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
8

"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
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

A
spend as much revenue as possible.
B
cut spending to a bare minimum.
C
return as much money to taxpayers as possible.
D
allocate money to programs and projects.

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