1. Which of the following is true concerning the consumption habits of ALL levels of government?

a. All levels of government combined consume close to one-third of the nation’ output.

b. The levels of government consume all of the nation’s output and then ration out resources as it sees fit.

c. the private sector does not produce any goods for the government

d. The levels of government rarely consume any of the nation’s output

2. Which of the following is an example of governmental MANDATORY SPENDING?

a. Educational programs

b. Environmental and Space Programs

c. Paying the interest on the federal debt

d. National defense spending

3. The state governments spend most of their money on

a. National guard training

b. Education

c. State highway repair

d. Intergovernmental expenditures

4. During which year did the first federal budget surplus occur within the last three decades?

a. 1998

b. 1975

c. 1985

d. 1990

5. Which is true concerning the Gramm-Rudmand-Hollings Bill?

a. It was a bill that helped female employees get tax exemptions

b. It was legislation intended to establish a balanced budget

c. It was a bill that was vetoed because it limited the government’s ability to tax

d. It was a bill that was passed to put national defence on the mandatory spending list

6. Which of the following is an example of how the government uses taxes to redistribute income?

a. The government puts heavy taxes on the poor to gain revenue.

b. the government places very low taxes on the rich so that they can keep their money.

c. People with income pay income taxes and the government can spend money on transfer payments.

d. The government taxes all people equally