U. S. Government: Democracy In Action

Chapter 20: Taxing and Spending

Taxing and Spending

1
The federal government's biggest single source of revenue is __________
A)borrowing.
B)individual income taxes.
C)corporate income taxes.
D)social insurance taxes.
2
Luxury taxes are levied on goods such as __________
A)liquor.
B)gasoline.
C)oil.
D)tires.
3
The first step in the executive budget-making process involves __________
A)the OMB analyzing the nation's economic situation.
B)the president assessing the impact of the preliminary budget.
C)each federal agency drawing up a spending plan.
D)agencies working on detailed plans to fit presidential guidelines.
4
About 70 percent of the budget consists of __________
A)interest on the national debt.
B)defense spending.
C)spending on transportation.
D)uncontrollables.
5
Government fiscal policy influences the economy by __________
A)controlling the supply of money.
B)controlling the supply of credit.
C)using government spending.
D)balancing the budget.
6
Almost half of every dollar the government spends goes for __________
A)benefit payments.
B)national defense.
C)grants to communities.
D)interest on the national debt.
7
The sum of all goods and services produced in the nation in a year is called the __________
A)budget deficit.
B)national debt.
C)gross national product.
D)free enterprise system.
8
The Fed encourages borrowing and stimulates the economy by __________
A)raising the discount rate.
B)lowering the discount rate.
C)raising the reserve requirement.
D)selling government securities.
9
The Tax Reform Act of 1986 required that individuals in the top income bracket pay __________
A)15 percent of the income in income taxes.
B)28 percent of their income in income taxes.
C)36 percent of their income in income taxes.
D)39.6 percent of their income in income taxes.
10
The best forecast of this year's budget is __________
A)last year's budget.
B)last year's budget doubled.
C)last year's budget, minus interest on the debt.
D)last year's budget, plus a little more.
US Government: Democracy In Action
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