Chapter 14

How does a balanced budget amendment work? A. When revenue drops below spending levels, spending must, according to state law, be curtailed. B. When expenditures drop below certain levels, revenue must, according to state law, be curtailed. C. When revenue drops below spending levels, spending must, according to state law, be increased. D. When expenditures drop below certain levels, revenue must, according to state law, be increased.

When revenue drops below spending levels, spending must, according to state law, be curtailed.

One of the reasons it has been so difficult for Congress to bring federal spending under control is because A. the crowding-out effect has been ineffective. B. sequestration has worked so well. C. the federal budget has many entitlements that people do not want cut. D. the pay-as-you-go provisions have been so expensive.

the federal budget has many entitlements that people do not want cut.

What is a fiscal year? A. 12-month financial planning period that always coincides with the calendar year B. 12-month financial planning period that may or may not coincide with the calendar year C. 12-month financial planning period that cannot coincide with the calendar year D.12-month calendar reserved for the government

12-month financial planning period that may or may not coincide with the calendar year

What is the primary source of revenue for the government? A. Social Security payroll taxes B. Individual income taxes C. Borrowing D. Customs duties

Individual income taxes

What is a sin tax? A. It is a tax designed to reduce consumption of products that people need. B. It is a tax designed to reduce consumption of products that people use infrequently. C. It is a tax designed to reduce consumption of products that are socially undesirable. D. It is a tax designed to reduce consumption of products that are socially desirable.

It is a tax designed to reduce consumption of products that are socially undesirable.

What are spending caps? A. Requirements that new spending proposals or tax cuts must be offset by reductions elsewhere B. Legal limits on annual discretionary spending C. Laws that require automatic budget cuts D. Legal limits on the total amount of money the government can borrow

Legal limits on annual discretionary spending

Which level of government has primary responsibility for funding elementary and secondary education? A. State B. Federal C. There is equal responsibility between all three levels of government. D. Local

Local

1.Why is resource allocation affected by taxes on products and services? A. People buy less of a product or use a service less, so companies allocate less to production. B. People buy more of a product or use a service more, so companies allocate more to production. C. People buy less of a product but use services more, so companies allocate more to providing services. D. People buy more of a product but use services less, so companies allocate more to production.

People buy less of a product or use a service less, so companies allocate less to production.

What are the criteria for effective taxes? A. Ability, efficiency, and equity B. Constancy, simplicity, and efficiency C. Simplicity, efficiency, and equity D. Ability, constancy, and efficiency

Simplicity, efficiency, and equity

If I have more _____ than _____, I have a ______. A. revenues; expenditures; balanced budget B. expenditures; revenues; surplus C. revenues; expenditures; deficit D. expenditures; revenues; deficit

expenditures; revenues; deficit