AnswersEconomicsFiscal Policy: Spending

Fiscal Policy: Spending — Quiz Answers

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21
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Read the passage. "Meeting the spending targets in this budget meant some very difficult choices." President Barack Obama, 2012 Budget Message of the President What did the president mean when he said he had to face “very difficult choices” when creating a federal budget?

A
deciding which country to borrow from to finance spending
B
deciding how to keep interest rates low on the national debt
C
deciding what would be funded and what would be cut
D
deciding how much to increase tax rates
22
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Which of these effects of expansionary spending would a government most want to avoid?

A
higher employment
B
growth in consumer spending
C
higher inflation
D
growth in production
23

When revenues are higher than expenditures in a budget, that budget

A
shows a surplus.
B
is in balance.
C
shows a deficit.
D
must be discarded.
24

What is the main goal in creating the federal budget?

A
finding a way to allow the economy to run on its own
B
finding a way to slow down rapid economic growth
C
deciding how to manage the government’s tax revenue and expenditures
D
managing businesses and increasing spending on all programs
25

Read the passage. "Meeting the spending targets in this budget meant some very difficult choices." President Barack Obama, 2012 Budget Message of the President What did the president mean when he said he had to face “very difficult choices” when creating a federal budget?

A
deciding what would be funded and what would be cut
B
deciding which country to borrow from to finance spending
C
deciding how much to increase tax rates
D
deciding how to keep interest rates low on the national debt
26

What is the main goal in creating the federal budget?

A
managing businesses and increasing spending on all programs
B
finding a way to allow the economy to run on its own
C
finding a way to slow down rapid economic growth
D
deciding how to manage the government’s tax revenue and expenditures
27

What is the main goal in creating the federal budget?

A
deciding how to manage the government’s tax revenue and expenditures
B
finding a way to slow down rapid economic growth
C
finding a way to allow the economy to run on its own
D
managing businesses and increasing spending on all programs
28

Which of these statements most accurately describes the federal government and its employees?

A
The federal government is not allowed to hire employees.
B
The majority of Americans are employed by the federal government.
C
Millions of Americans work for the federal government.
D
The number of federal employees is too small to affect government spending.
29

What does deficit spending require a government to do?

A
take on debt
B
hire more workers
C
lay off workers
D
cut taxes
30

Which of these statements most accurately describes the federal government and its employees?

A
The majority of Americans are employed by the federal government.
B
Millions of Americans work for the federal government.
C
The federal government is not allowed to hire employees.
D
The number of federal employees is too small to affect government spending.
31

Spending that is required by law is known as

A
mandatory spending.
B
deficit spending.
C
expansionary spending.
D
discretionary spending.
32

What is the main goal in creating the federal budget?

A
finding a way to slow down rapid economic growth
B
finding a way to allow the economy to run on its own
C
managing businesses and increasing spending on all programs
D
deciding how to manage the government’s tax revenue and expenditures
33

Which of these effects of expansionary spending would a government most want to avoid?

A
growth in production
B
higher inflation
C
higher employment
D
growth in consumer spending
34

What does deficit spending require a government to do?

A
lay off workers
B
cut taxes
C
take on debt
D
hire more workers
35

How does the policy that Gino is describing most likely affect interest rates and unemployment? Gino is writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.

A
The policy would most likely decrease interest rates and unemployment.
B
The policy would most likely increase unemployment but decrease interest rates.
C
The policy would most likely increase interest rates but decrease unemployment.
D
The policy would most likely increase interest rates and unemployment.
36

Spending that is required by law is known as

A
expansionary spending.
B
mandatory spending.
C
deficit spending.
D
discretionary spending.
37

How does the policy that Gino is describing most likely affect interest rates and unemployment? Gino is writing a paper about the effects of fiscal policies on the economy. Gino is describing a fiscal policy that aims to improve inflation.

A
The policy would most likely increase interest rates but decrease unemployment.
B
The policy would most likely increase interest rates and unemployment.
C
The policy would most likely decrease interest rates and unemployment.
D
The policy would most likely increase unemployment but decrease interest rates.
38

Which of these accurately explains the impact of an expansionary policy on interest rates, inflation, and unemployment?

A
Government spending with an expansionary policy can increase interest rates and inflation but can reduce unemployment.
B
Government spending with an expansionary policy can reduce inflation and interest rates but can increase unemployment.
C
Government spending with an expansionary policy can increase unemployment and interest rates but can reduce inflation.
D
Government spending with an expansionary policy can reduce interest rates and unemployment but can increase inflation.
39

Which of these accurately explains the impact of an expansionary policy on interest rates, inflation, and unemployment?

A
Government spending with an expansionary policy can reduce inflation and interest rates but can increase unemployment.
B
Government spending with an expansionary policy can reduce interest rates and unemployment but can increase inflation.
C
Government spending with an expansionary policy can increase interest rates and inflation but can reduce unemployment.
D
Government spending with an expansionary policy can increase unemployment and interest rates but can reduce inflation.
40

When revenues are higher than expenditures in a budget, that budget

A
is in balance.
B
shows a deficit.
C
must be discarded.
D
shows a surplus.

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