The Role of Government Test Review

1. What is the US governments biggest source of revenue?

• Payroll Taxes
• Income Tax
• Corporate Income Taxes

2. Which type of revenue instrument is described by this statement: $100 face value, 20 year term, 5% interest?

• Company Stock
• Mutual Fund
• Bond

3. A plan for spending is otherwise known as

• Allocation
• Mission Statement
• Proposal

4. When the government spends money on Education, it is an example of which type of spending?

• Interest on Debts
• Mandatory Spending
• Discretionary Spending

5. When the government spends money on Social Security, it is an example of which type of spending?

• Interest on Debts
• Mandatory Spending
• Discretionary Spending

6. When the government spends LESS than it takes in in revenue results in

• a deficit
• a surplus
• equilibrium

7. When the government spends MORE than it takes in in revenue results in

• a deficit
• a surplus
• equilibrium

8. When a government incurs more deficits than surpluses over the years, they must

• ask the President for permission to print more money to cover the shortfall
• Short the expenditures in the next budget by the amount they overspent in the current year
• incur debt to cover the difference

9. When a tax takes a greater percentage of a poor persons money, it is a

• progressive tax
• proportional tax
• regressive tax

10. When the tax rate is the same regardless of income, it is a

• progressive tax
• proportional tax
• regressive tax