Name
Date
Cla:
Chapter 10, Section I
o
HE ECONOMICS OF GOVERNMENT
SPENDING
SCORE
Matching: Match each item in Column A with the items in Column B. Write the correct
letters in the blanks. (10 points each)
B
1. pork
2. public sector
a.
part of the economy made up of private individuals
and privately owned businesses
b.
a line-item budget expenditure that circumvents
normal budget procedures and benefits a small
number of people or businesses
c.
transfer payment one level of government makes to
another
d.
way in which income is allocated among families,
individuals, or other designated groups in the
economy
e.
payment for which the government receives neither
goods nor services in return
f.
part of the economy made up of federal, state, and
local governments
3. private sector
4. transfer payment
5. distribution of income
'
Multiple Choice: In the blank at the left, write the letter of the choice that best completes
the statement or answers the question. (10 points each)
O
O
u
6. The two broad categories of government spending are
a.
b.
c.
d.
defense and welfare.
the purchase of goods and services, and transfer payments.
public and private.
payments and transfers.
7. Since the 1930s, spending by all levels of government as a percentage of GDP
X
'f
o
i
a. has increased.
b. has decreased slightly.
c. has decreased dramatically.
d. has remained fairly constant.
.
8. Social Security is an example of a
a. pork expenditure.
b. private sector expenditure.
c. subsidy.
d. transfer payment.
9. Which of the following would be considered a grant-in-aid?
a. an interstate highway construction program
b. unemployment compensation
c. government purchases of airplanes and tanks
d. wages and salaries
10. Public sector spending
a.
b.
c.
d.
has no effect on the distribution of income.
does not compete with the private sector.
has little effect on the tax burden of individual taxpayers.
both directly and indirectly affects how resources are allocated.
Economics Principles and Practices
121
Class
Date.
Name
Chapter 10, Section 2
EDERAL, STATE, AND LOCAL
GOVERNMENT EXPENDITURES
Matching: Match each item in Column A with the items in Column B. Write the correct
letters in the blanks. (10 points each)
B
1. federal budget
2. fiscal year
a.
constitutional provision requiring that annual
spending not exceed revenues
b.
amount by which federal government expenditures
exceed revenues
c.
an act of Congress that allows federal agencies to
spend money for specific purposes
d.
annual plan outlining proposed revenues and
expenditures for the coming year
e.
f.
largest category of state spending
3. balanced budget amendment
4. intergovernmental expenditures
5. appropriations bill
a 12-month financial planning period that may or
may not coincide with the calendar year
Multiple Choice: In the blank at the left, write the letter of the choice that best completes
the statement or answers the question. (10 points each)
6. Government health expenditures include a joint federal-state insurance program for low-income persons
called
a. Medicare.
b. OSHA.
c. Medicaid.
d. Social Security.
c
i
7. Of the following four categories, which accounts for the largest amount of local expenditures?
a. insurance trust funds
b. public utilities
c. highways
d. elementary and secondary education
8. Who formulates the federal budget?
a. the Senate
b. the House of Representatives
c. the president
d. the Congressional Budget Office
8,
9. What role does the Office of Management and Budget (OMB) play in establishing the federal budget?
a.
b.
c.
d.
The OMB assembles the budget under presidential guidelines.
The OMB approves the final budget.
The OMB evaluates the economic impact of proposed congressional actions on the budget.
The OMB determines how the money in the budget will be distributed among the major categories of
spending.
10. Which of the following is an example of discretionary spending?
a. Social Security
b. national defense
122
c. Medicare
d. interest on the national debt
Economics Principles and Practices
*
Date
Name
Class.
A
Chapter JO, Sect/on 3
iJEFICITS, SURPLUSES, AND
THE NATIONAL DEBT
SCORE
Matching: Match each item in Column A with the items in Column B. Write the correct
letters in the blanks. (10 points each)
B
1. deficit spending
2.
national debt
3. trust funds
4. crowding-out effect
a.
spending in excess of revenues collected
b.
broad social programs for eligible individuals
c.
total amount borrowed from investors to finance deficit spending
d.
budget with neither a surplus nor a deficit
e.
special accounts used to fund specific types of expenditures
f.
higher-than-normal interest rates caused by heavy government borrowing
5. entitlements
Multiple Choice: In the blank at the left, write the letter of the choice that best completes
the statement or answers the question. (10 points each)
>
6.
In what way is the national debt different from private debt?
a. Most of the national debt is owed to others.
c. Private debt does not have to be repaid by a specific date.
b. The national debt does not have to be repaid by a specific date.
d. The government gives up purchasing power when it repays the national debt.
7. Which of the following statements best describes the relationship of the federal deficit to the national
debt?
a.
b.
c.
d.
ou
s
8.
The federal deficit is another term for the national debt.
The federal deficit leads to borrowing, which adds to the national debt.
The national debt leads to borrowing, which adds to the federal deficit.
The national debt is the opposite of the federal deficit.
Which of the following is an example of an entitlement payment?
a. federal money given to a contractor in exchange for military uniforms
o
b. federal money given to a senior citizen as a Social Security payment
c. federal money spent to pay interest on the national debt
d. federal money spent to build a new public highway
9. Which of the following was the main feature of the Budget Enforcement Act passed in 1990?
J
3
a. the line-item veto
c. a pay-as-you-go provision
b. spending caps
d. entitlements
10. Which of the following normally decreases the federal deficit?
a. an increase in taxes
b. an increase in spending
Economics Principles and Practices
c. entitlement programs
d. low economic activity
123
Name
Date
Class
•IMMMMIMMMMHIMMMM^^:.'.• • * # • •
•*«
Economic Vocabulary Activity
IHAPTER 10: GOVERNMENT SPENDING
Directions: Select and write the term that best completes each sentence.
1. The
(fiscal year/federal budget) is a 12-month financial planning period that may or
may not coincide with a calendar time period.
2. Some states have enacted a
(Gross Domestic Product/balanced budget amendment) to help them hold spending in line with state revenues.
3.
(Transfer payments/Entitlements), such as Medicaid, provide social programs for
lower-income people.
4. The
(public sector/private sector) consists of federal, state, and local governments.
5. The
(federal budget/federal debt) is the total amount borrowed from investors to
finance deficit spending by the national government.
6. The
(distribution of income/Gross Domestic Product) is the dollar value of all final
goods, services, and structures produced during any one year.
7. A
another.
8. An
specific purpose.
(grant-in-aid/trust fund) is a transfer payment one level of government makes to
(entitlement/appropriations bill) is a law that sets federal money aside for a
9. A
(balanced budget/trust fund) is a special account that provides money for
specific types of expenditures, such as Social Security.
10. The
(Gross Domestic Product/crowding-out effect) is higher than normal interest
rates caused by heavy government borrowing.
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11. The government's plan outlining proposed revenues and expenditures for the coming year is the
(federal budget/federal budget deficit).
12. The
(balanced budget amendment/pay-as-you-go provision) is a requirement that
new spending proposals or tax cuts must be offset by reductions elsewhere.
13.
10
(Entitlements/Spending caps) are legal limits on annual discretionary spending.
Economic Vocabulary Activities
3