12.13.T - Quiz 9: Government Spending and Services

Hazlitt discusses the fact that the Tennessee Valley Authority increased prosperity in its region. Why does he say this isn't surprising and shouldn't be regarded as a miraculous result of government spending? Because taxes were taken from other parts of the country and concentrated in this one section. Because the Tennessee Valley Authority was a useful project. Because the government spending took place during an economic downturn. Because tax dollars are used more effectively by the government than by private citizens.

Because taxes were taken from other parts of the country and concentrated in this one section.

Hazlitt writes about an example of government spending where bureaucrats want to build a new bridge connecting two towns, even when existing bridges can easily handle the current traffic. What are the arguments made for building the bridge even though it isn't needed? (choose all that apply) Building the bridge will provide employment. Building the bridge will create unemployment. The bridge will exist thanks to government spending when otherwise it wouldn't have. The bridge only exists at the expense of something else.

Building the bridge will provide employment.; The bridge will exist thanks to government spending when otherwise it wouldn't have.

Why is contractionary monetary policy rarely used? It risks creating high inflation that can eventually turn into hyperinflation. Politicians recognize that it makes the economy grow too quickly. It risks creating extraordinary amounts of debt. Voters don't like tax increases, and politicians who pass such laws risk being voted out of office.

Voters don't like tax increases, and politicians who pass such laws risk being voted out of office.

Hazlitt writes, "Government 'encouragement' to business is sometimes as much to be feared as government hostility." This "supposed encouragement" often takes which of the following forms? (choose all that apply) a guarantee of private loans reduction of investment tax credits direct grant of government credit total forgiveness of private loans

a guarantee of private loans; direct grant of government credit

Contractionary fiscal policy is beneficial when the economy is growing at a greater rate than ____________. twelve to fifteen percent per year eight to ten percent per year two to three percent per year four to five percent per year

two to three percent per year

In the United States, government welfare services include which of the following programs? (choose all that apply) unemployment benefits public housing food stamps universal basic income

unemployment benefits public housing food stamps

What is the technical and political process that involves the design and development of land use and infrastructure? zoning urban planning transportation infrastructure land regulation

urban planning

An asset bubble occurs when assets like housing, oil, or gold increase significantly, beyond their actual ______. value opportunity cost supply demand

value

America's budget deficit reached a trillion dollars during the terms of which presidents? (choose all that apply) Donald Trump Bill Clinton Barack Obama George W. Bush

Donald Trump; Barack Obama

During the Great Recession, the federal government employed fiscal policy to try to stimulate the economy. Which of the following are examples of legislation that Congress passed to try to turn around the economy during the Great Recession? (choose all that apply) Economic Stimulus Act of 2008 Fiscal Recovery Stimulus Act of 2009 Targeted Asset Recovery Act of 2010 American Recovery and Reinvestment Act of 2009

Economic Stimulus Act of 2008; American Recovery and Reinvestment Act of 2009

What United States president initiated an unprecedented spending spree with the introduction of the New Deal? William Howard Taft Herbert Hoover Franklin D. Roosevelt John F. Kennedy

Franklin D. Roosevelt

Each year, the finer points of America's federal budget are first debated in twelve _____________. presidential committees appropriations committees executive committees budget committees

appropriations committees

Taxes on imported goods are called ______________. fees international taxes excise taxes tariffs

tariffs

Which of the following were programs or legislation created during the New Deal? (choose all that apply) Agricultural Adjustment Act Public Works Administration Civilian Conservation Corps Social Security Act

Agricultural Adjustment Act; Public Works Administration; Civilian Conservation Corps; Social Security Act;

According to Hazlitt, what are the differences between loans provided by government agencies and loans provided by private lenders? (choose all that apply) Private lenders risk their own money, whereas government agencies risk other people's money. Private lenders will take more risks than government agencies. Government agencies will take more risks than private lenders. Government agencies are stricter about whom they lend to.

Private lenders risk their own money, whereas government agencies risk other people's money; Government agencies will take more risks than private lenders.

According to Hazlitt, what is the end result when the government provides loans or subsidies to business? The government increases employment at the expense of overall production. The government increases overall production at the expense of full employment. The government taxes unsuccessful business in order to make successful businesses more efficient. The government taxes successful businesses in order to support unsuccessful businesses.

The government taxes successful businesses in order to support unsuccessful businesses.

A tax that applies the same tax rate regardless of income is called a __________. flat tax fair tax regressive tax progressive tax

flat tax

When government expenditures exceed government revenues, the federal budget is considered to be ___________. in surplus in deficit in debt balanced

in deficit?

When government revenues exceed government expenditures, the federal budget is considered to be __________. balanced in debt in surplus in deficit

in surplus

As of 2019, there is over ______________ of federal student loan debt in the United States. $119 billion $1.5 trillion $25 trillion $189 million

$1.5 trillion

America's national debt rose from $5.5 trillion in 2000 to _________ by the end of 2019. $30 trillion $8 trillion $23 trillion $15 trillion

$23 trillion

The Great Recession was partially caused by an asset bubble in the ________ market. Stock Oil Gold Housing

Housing

When a bridge is built using taxpayer funds, the result is a _________. creation of jobs reduction in jobs diversion of jobs

diversion of jobs

When a bridge is built using taxpayer funds, the result is a _________. diversion of jobs creation of jobs reduction in jobs

diversion of jobs

A tax that's levied when an item is produced is called a(n) ___________. excise tax tariff sales tax fee

excise tax

In the United States, the federal government is mostly funded by which of the following types of taxes? (choose all that apply) excise taxes fees payroll taxes individual income taxes property taxes tariffs sales taxes corporate income taxes

excise taxes fees payroll taxes individual income taxes tariffs corporate income taxes *all accept property and sales

Fiscal policy characterized by increased government spending and decreased taxes is called ______________. contractionary fiscal policy regressive fiscal policy expansionary fiscal policy progressive fiscal policy

expansionary fiscal policy?

The major excise taxes in the United States are on which of the following products? (choose all that apply) books electricity gasoline steel alcohol tobacco

gasoline; alcohol; tobacco

In his discussion of public works, Hazlitt writes, "There is no more persistent and influential faith in the world today than the faith in ______________." consumer sovereignty full employment government spending reducing taxes

government spending

Which of the following are consequences of contractionary monetary policy rarely being used? (choose all that apply) decreased government spending increased economic stability increased government debt high inflation

increased government debt; high inflation

The Tax Cuts and Jobs Act of 2017 changed the corporate income tax from 35% to __________. 21% 13% 28% 45%

21%

The government plays an important role in keeping private companies accountable and preventing them from causing excessive pollution. In the United States, the federal organization tasked with protecting human and environmental health is the _________________. Federal Environment Administration Department of Pollution Prevention Health and Hazard Council Environmental Protection Agency

Environmental Protection Agency

One major government service is building transportation infrastructure, such as roads and airports. The government also regulates this travel. Which of the following is a government organization that's responsible for regulating travel in the United States? Transportation Agency Department of Railroads Federal Aviation Administration Office of Road Regulations

Federal Aviation Administration

Increased taxes reduce the economic incentives for business success. Which of the following are consequences of these reduced incentives? (choose all that apply) Real wages are held down. People are deterred from starting new enterprises. Improved machinery and technology are developed more quickly. Potential entrepreneurs decide not to become new employers. Consumers are prevented from getting better and cheaper products. Existing businesses don't give new employment.

Real wages are held down; People are deterred from starting new enterprises; Potential entrepreneurs decide not to become new employers; Consumers are prevented from getting better and cheaper products; Existing businesses don't give new employment.

According to Hazlitt, which of the following are true, in general, about the individuals selected for government loans? (choose all that apply) These individuals will be more efficient in their use of resources. They will be poorer risks than the individuals selected for private loans. There will be a higher percentage of failures, or defaults, on these loans. More money will be lost by loans to these individuals.

They will be poorer risks than the individuals selected for private loans; There will be a higher percentage of failures, or defaults, on these loans; More money will be lost by loans to these individuals.

When government revenues equal government expenditures, the federal budget is considered to be ___________. in surplus balanced in deficit in debt

balanced

Fiscal policy characterized by decreased government spending and increased taxes is called ____________. regressive fiscal policy progressive fiscal policy contractionary fiscal policy expansionary fiscal policy

contractionary fiscal policy

Those who advocate for government lending believe that extending credit to individuals will help them prosper. However, an important point these advocates of government lending forget is that all credit is _________. marginal temporary debt permanent

debt

One consequence of high government debt is reduced investment. The government will have to spend much of its budget on interest payments instead of making investments in areas such as infrastructure, education, and research. Which of the following are ultimately consequences of reduced investment? (choose all that apply) less tax revenue increased debt slower economic growth increased deficits

less tax revenue; slower economic growth; increased deficits *all accept increased debt

According to Hazlitt, the belief that government loans for farmers are beneficial comes from which of the following "acts of shortsightedness"? (choose all that apply) thinking only of the impact on the government looking at the matter only from the standpoint of the farmers that borrow looking at the matter only from the standpoint of city workers thinking only of the first half of the transaction

looking at the matter only from the standpoint of the farmers that borrow; thinking only of the first half of the transaction

The sum total of all the money the government owes is referred to as the __________. government deficit federal credit national debt fiscal cliff

national debt

Hazlitt writes that the "pleasant dreams" of government being able to spend without taxing and being able to endlessly pile up debt "have always been shattered by" what? national insolvency or runaway inflation low production or runaway unemployment asset bubbles or unsustainability natural disaster or military conflict

national insolvency or runaway inflation

The government operates many public buildings, such as libraries and courthouses, as well as many public _____, including Yellowstone and Yosemite. parks mountains rivers works

parks

Which of the following is an example of a good or service that would not be profitable for the private sector to provide because non-payers would reap the benefits as much as the payers would? police protection education health insurance road construction

police protection

Emergency services provided by the government include which of the following services? (choose all that apply) police protection emergency medical services food stamps firefighting

police protection; emergency medical services; firefighting

A tax in which people with higher incomes pay higher tax rates is called a __________. regressive tax progressive tax flat tax You Answered fair tax

progressive tax

In the United States, local governments are primarily funded through __________. excise taxes payroll taxes income taxes property taxes

property taxes

Government legal protection includes which of the following services? (choose all that apply) Social Security protecting property rights enforcing contracts enforcing weights and measures

protecting property rights enforcing contracts enforcing weights and measures

In the United States, the bulk of spending by local and state governments goes to which of the following areas? (choose all that apply) road construction and repair national defense public education public welfare Social Security payments public safety

road construction and repair; public education; public welfare; public safety *all accept national defense and Social Security payments