Fiscal Policy Answers

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3

an excise taxan income taxa tariff

A
an excise tax
B
an income tax
C
a tariff
4

Fiscal policy is the government’s approach to

A
monitoring the value of money.
B
investing its money.
C
taxing and borrowing.
D
taxing and spending.
5

Look at a portion of a sample paycheck:

Question illustration
A
payroll
B
property
C
income
D
excise
6

What gives Congress the power to raise taxes to fund services?

A
the Federal Reserve Bank
B
the Internal Revenue Service
C
the Bill of Rights
D
the Constitution
7

What is a difference between payroll and income taxes?

A
Payroll taxes are itemized deductions from an individual’s paycheck, while income taxes are based on an individual’s salary.
B
Payroll taxes are taken out of an individual’s salary once a year, while income taxes are paid by workers every time they get paid.
C
Payroll taxes are based on an individual’s salary, while income taxes are itemized deductions from an individual’s paycheck.
D
Payroll taxes are paid by individuals who have a job, while income taxes are partially funded by employers and employees.
8

millionbilliontrillion

A
million
B
billion
C
trillion
9

Money spent on government programs is referred to as

A
bonding.
B
an obligation.
C
revenue.
D
an expenditure.
10

Which best describes a way in which the government might respond to rising threats to national security through fiscal policy?

A
sending troops overseas
B
passing an excise tax on gasoline
C
appointing a new Secretary of Homeland Security
D
increasing military spending
11

Revenue is the amount of money that

A
the government spends on defense.
B
the government collects from taxes or borrowing.
C
the government owes in debt.
D
the government uses to provide social services.
12

expenditurerevenuebudget

A
expenditure
B
revenue
C
budget
13

What are some examples of excise taxes imposed by the government? Check all that apply.

A
gambling
B
fast-food restaurants
C
cigarettes
D
movies
E
baseball games
F
alcohol
G
gasoline
H
hotels
14

Based on the taxing and spending cycle, how will changing expenditures affect taxes collected by the government?

A
Spending less will help lower prices, leading to an increase in tax revenue for the government.
B
Spending less will reduce services, leading to a reduction in tax revenue for the government.
C
Spending more will boost prices, leading to an increase in tax revenue for the government.
D
Spending more will increase services, leading to a reduction in tax revenue for the government.
15

Examine the pie chart.

Question illustration
A
Social Security, Labor and Transportation, and Other
B
Social Security and Education/Health and Human Services
C
Defense/Homeland Security, and Social Security
D
Defense/Homeland Security, Treasury, and Veterans Affairs
16

In addition to raising money, the government imposes excise taxes to

A
protect manufacturers of specific products.
B
encourage the use of specific products.
C
discourage the use of specific products.
D
protect consumers from specific products.

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