Chapter 10 Final Econ – Flashcards
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The two broad categories of government spending are
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The purchase of goods and services and transfer payments
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Since the 1930s, spending by all levels of government as a percentage of GPD
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has increased
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Social Security is an example of a
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transfer payment
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Which of the following would be considered a grand-in-aid?
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an interstate highway construction program
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Public sector spending
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both directly and indirectly affects how resources are allocated
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Government helath expenditures include a joint federal-state insurance program
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Medicaid
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Of the following four categories, which accounts for the largest amount of local expenditures?
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elementary and secondary education
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Who formulates the federal budgest?
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The president
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Which of the following is an example of discretionary spending?
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national defense
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What role does the Office of Management and Budget (OMB) play in establishing the federal budget?
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the OMB assembles the budget under presidental guidelines
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In what way is the national debt different from private debt?
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The national debt does not have to be repaid by a specific date
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Which of the following statements best describes the relationship of the federal deficit to the national debt?
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The federal deficit leads to borrowing, which adds to the national debt.
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which of the following is an example of an entitlement payment?
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federal money given to a senior citizen as a Social Security payment
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Which of the following normally decreases the federal deficit?
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an increase in taxes
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Which of the following was the main feature of the Budget Enforcement Act of 1990?
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a pay-as-you-go provision
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All levels of government combined consume about
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one third of the nation output
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Transfer payments from the government to individuals might be used to
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support Social Security
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The sequence for the approval of the federal budget is
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president to Congress and back to president
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An ecxample of discretionary spending is financing for
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national defense
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Which act was created in an attempt to trim $500 billion from the deficit over a five year period?
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Omnibus Budget Reconciliation Act
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The largest category of state spending is
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intergovernmental expenditures
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the first federal budget surplus during the past 45 years occured in
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1998
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Legislation intended to establish a balanced budget was the
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Gramm-Rudman-Hollings Bill.
