Chapter 15

Question 1

1. When tax revenues are equal to spending, there is a

budget deficit.

government absorption.

budget surplus.

None of the above are correct.

balanced budget.

Answer 1

balanced budget

Question 2

Which of the following type of taxes provide the least revenue for the federal government?

sales taxes

corporate taxes

payroll taxes

income taxes

All of the above provide equal amounts of revenue.

Answer 2

sales tax

Question 3

The federal government uses all the following taxes to raise revenue except:

property taxes

corporate taxes

income taxes

sales taxes

payroll taxes

Answer 3

property taxes

Question 4

Which of the following is the largest component of federal government expenditures?

defense purchases

capital purchases

transfer payments

payroll for federal government employees

interest payments

Answer 4

transfer payments

Question 5

The total amount of outstanding loans owed by the federal government is known as

the federal debt.

the budget deficit.

None of the above are correct.

the current account deficit.

the yearly U.S. government deficit.

Answer 5

the federal debt

Question 6

Today the debt to GDP ratio is the highest as it had been since the end of World War II.

false
true

Answer 6

false