Chapter 10 Final Econ

Legislation intended to establish a balanced budget was the

Gramm-Rudman-Hollings Bill.

Government helath expenditures include a joint federal-state insurance program

Medicaid

Which act was created in an attempt to trim $500 billion from the deficit over a five year period?

Omnibus Budget Reconciliation Act

Which of the following statements best describes the relationship of the federal deficit to the national debt?

The federal deficit leads to borrowing, which adds to the national debt.

Public sector spending

both directly and indirectly affects how resources are allocated

Since the 1930s, spending by all levels of government as a percentage of GPD

has increased

The largest category of state spending is

intergovernmental expenditures

All levels of government combined consume about

one third of the nation output

The sequence for the approval of the federal budget is

president to Congress and back to president

Transfer payments from the government to individuals might be used to

support Social Security

What role does the Office of Management and Budget (OMB) play in establishing the federal budget?

the OMB assembles the budget under presidental guidelines

Social Security is an example of a

transfer payment

the first federal budget surplus during the past 45 years occured in

1998

In what way is the national debt different from private debt?

The national debt does not have to be repaid by a specific date

Who formulates the federal budgest?

The president

The two broad categories of government spending are

The purchase of goods and services and transfer payments

Which of the following was the main feature of the Budget Enforcement Act of 1990?

a pay-as-you-go provision

Which of the following normally decreases the federal deficit?

an increase in taxes

Which of the following would be considered a grand-in-aid?

an interstate highway construction program

Of the following four categories, which accounts for the largest amount of local expenditures?

elementary and secondary education

which of the following is an example of an entitlement payment?

federal money given to a senior citizen as a Social Security payment

An ecxample of discretionary spending is financing for

national defense

Which of the following is an example of discretionary spending?

national defense