Test 1

Question 1

what are some reasons for the federal debt

Answer 1

1. leaving the gold standard
2. creation of social security
3. incrementalist insight

Question 2

what is the main difference between private and public budgets

Answer 2

private budgets can’t have higher expenditures than revenues and public budgets can

Question 3

characteristic of pure public goods w example

Answer 3

non rival and non excludable. EX:

Question 4

characteristics of pure private goods w/example

Answer 4

rival and excludable. EX: iphone

Question 5

characteristics of toll goods w/example

Answer 5

excludable but non rival. EX: toll bridges (people who use the bridge get the service but it doesn’t diminish the bridge for the next person)

Question 6

characteristics of common pool goods w/eample

Answer 6

non-excludable but rival. EX: gas and oil deposits

Question 7

What is tragedy of the commons

Answer 7

because the good is non-excludable it leads to depletion of the resource because everyone can use it

Question 8

what is incrementalist insight

Answer 8

when government policy moves at a very slow pace

Question 9

what is the dillon’s rule

Answer 9

a rule of thumb that says if the state is silent about an issue it is reserved for the local governments

Question 10

how many estimated government entities are there

Answer 10

100,000

Question 11

What month does the federal budget begin in

Answer 11

October

Question 12

how many columns are there in the federal budget

Answer 12

4

Question 13

what does the final report year column say

Answer 13

provides the fiscal numbers for the most recent completed year

Question 14

what does the progress report year column say

Answer 14

shows what was budgeted for the year and what the projected results are going to be

Question 15

what does the budget year column say

Answer 15

it provides what has been approved to be paid for and what still needs approval

Question 16

what does the out year column say

Answer 16

allows the budget to be thought out 4 years in advance for the federal government

Question 17

what are the 4 steps to the budget cycle

Answer 17

1. executive preparation
2. legislative consideration
3. execution
4. audit and evaluation

Question 18

what is the OMB

Answer 18

office of management of budget. collects all agencies budget requests and sends it to congress for the president

Question 19

what is the CBO

Answer 19

congressional budget office. the same as the OMB for congress

Question 20

what is the GAO

Answer 20

government accountability office. the watchdogs for congress

Question 21

what are the different types of budgeting authority

Answer 21

1.appropritions authority
2.contract authority
3. borrowing authority
4. loan authority
5. entitlement authority

Question 22

what does appropriations authority mean

Answer 22

allows the agencies to ask for money for specific purposes. most commonly used

Question 23

what does contract authority mean

Answer 23

provides a contract to allow spending before the agency can spend money. stops backdoor spending

Question 24

what does borrowing authority mean

Answer 24

allows an agency to borrow funds

Question 25

what are the 2 types of agency funding

Answer 25

supplemental and continuing

Question 26

what is the difference between supplemental and continuing funding

Answer 26

1. supplemental is when the agency needs new funds but has not run out
2. continuing is when the agency has run out of funds

Question 27

what is the majority of local government spending

Answer 27

40% education

Question 28

what is the largest state expenditure

Answer 28

social welfare programs

Question 29

what are the 2 tax structures

Answer 29

horizontal and vertical

Question 30

what is horizontal equity

Answer 30

equal payment for people making the same amount of money

Question 31

what is vertical equity

Answer 31

no matter what you make you all pay the same percentage of income

Question 32

what is a regressive tax

Answer 32

when a tax is easier on people who make more (normally when the tax is capped at a certain income)

Question 33

what is a progressive tax

Answer 33

when the well off pay a bigger portion of the tax than others

Question 34

what taxes are the most dominant in the US

Answer 34

income and payroll tax

Question 35

what part of the budget does payroll go to

Answer 35

mandatory spending

Question 36

what part of the budget does income tax go to

Answer 36

discretionary spending

Question 37

4 types of sales tax

Answer 37

1. general (applies to all transactions)
2. selective (applies to certain transactions)
3. specific (applies to a specific unit of goods bought , Gas per gallon)
4. ad valorem (applied to the total cost of the transaction)

Question 38

what are earmarked taxes

Answer 38

taxes collected for a specific government purpose

Question 39

growth rate between years formula

Answer 39

Rate = ((end year / beginning year)^1/ number of years) - 1