Chapter 17

Which of the following is the percentage of annual US government spending allocated to foreign aid?

1%

A government annually collects $230 billion in tax revenue and allocates $29 billion to its universal healthcare spending. What percentage of this government's budget is spent on healthcare?

12.60%

A government annually collects $320 billion in tax revenue and allocates $42 billion to education spending. What percentage of this government's budget is spent on education?

13.12%

A government collects $600 billion annually in tax revenue. Each year it allocates $35 billion to healthcare and $50 billion for education. What percentage of annual tax revenue is allocated to these two categories of government spending?

14.16%

A government collects $700 billion annually in tax revenue. Each year it allocates $130 billion to interest payments that it must pay on its accumulated debt. What percentage of annual tax revenue is allocated to make these interest payments?

18.57%

A government annually collects $230 billion in tax revenue and allocates $70 billion to military spending. What percentage of this government's budget is spent on its military?

30.43%

A government collects $70 billion quarterly in tax revenue. Each year it allocates $15 billion to the justice system and $29 billion for the administrative costs. What percentage of its total annual tax revenue is left for allocation to the remaining categories of government spending?

84.29%

If a country's GDP increases, but its debt decrease during that year, then the country's debt to GDP ratio for the year will _________ in proportion to the magnitude of the changes

Increase or decrease

When a country's economy is producing at a level that exceeds its potential GDP, the standardized employment budget will show a _________ than the actual budget

Larger deficit

A __________ is calculated as a flat percentage of income, regardless of level of income

Proportional tax

When inflation begins to climb to unacceptable levels in the economy, then government should:

Use contractionary fiscal policy to shift aggregate demand to the left

If an economy moves into a recession, causing that country to produce less than potential GDP, then:

automatic stabilizers will cause tax revenue to decrease and government spending to increase.

A typical ____________________________ fiscal policy allows government to decrease the level of aggregate demand, through increases in taxes.

contractionary

If individual income tax accounts for more total revenue than the payroll tax in the U.S., why would over half the households in the country pay more in payroll taxes than in income taxes?

income tax is a progressive tax

The current level of US government accumulated debt, when measured in nominal dollars:

is higher than it has ever been.

Currently, the US government accumulated debt to GDP ratio:

is lower than its historical high point.

If government tax policy requires Jane to pay $25,000 in taxes on annual income of $200,000 and Mary to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

progressive

If government tax policy requires Bill to pay $20,000 in taxes on annual income of $200,000 and Paul to pay $10,000 in tax on annual income of $100,000, then the tax policy is:

proportional

When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is ____________________.

regressive

The time lag for monetary policy is typically _________ the time lag for fiscal policy

shorter than

When increasing oil prices cause aggregate supply to shift to the left, then:

unemployment and inflation increase.

If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will ________ in proportion to the magnitude of the changes

Increases

What do goods like gasoline, tobacco, and alcohol typically share in common?

They are all subject to government excise taxes.

The federal government levies _________ on people who pass assets _________, either after death or during life

an estate and gift tax; to the next generation

A government collects $700 billion annually in tax revenue. Each year it allocates $70 billion to the justice system and $130 billion for its own administrative costs. What percentage of annual tax revenue is allocated to these two categories of government spending?

28.57%

A _________ is created each time the federal government spends more than it collects in taxes in a given year

budget deficit

If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be:

budget deficit

If South Dakota's governor reports a budget surplus in 2011, that state government likely:

received more in taxes than it spent in that year.

If the economy is producing less than its potential GDP, _____________________ will show a larger deficit than the actual budget.

the standardized employment budget