1.
The progressive income tax systen currently in use authorixes wealthy people to
Correct Answer
B. Pay taxes at about twice the rate as people in the lowerst-income bracket
Explanation
The progressive income tax system currently in use authorizes wealthy people to pay taxes at about twice the rate as people in the lowest-income bracket. This means that as income increases, the tax rate also increases. Wealthy individuals are required to pay a higher percentage of their income in taxes compared to those in lower income brackets. This system aims to promote income redistribution and ensure that those with higher incomes contribute a larger proportion of their earnings towards funding government programs and services.
2.
Which of the following insitutions is responsible for compiling the president's budget proposal?
Correct Answer
D. Office of Management and Budget
Explanation
The Office of Management and Budget (OMB) is responsible for compiling the president's budget proposal. The OMB is an agency within the Executive Office of the President and assists the president in developing and implementing the federal budget. It works closely with other federal agencies to gather information and formulate the budget proposal, which is then submitted to Congress for consideration. The OMB plays a crucial role in the budget process, ensuring that the president's priorities and policies are reflected in the budget proposal.
3.
Which of the following are accurate statements abou the federal debt?I. The rising cost of public education has contributed significantly to the federal debtII. The debt allows the government to displace the cost of current policies onto the shoulders of future generationsIII. President Reagan's majoy tax cuts in the 1980s caused the national debt to grow to an unprecedented sizeIV. The government will erase the national debt as soon as it succeeds in balancing the fiscal budget
Correct Answer
D. II and III only
4.
All of the following statements accurately describe the data in the abover graphs EXCEPT
Correct Answer
E. The amount earned from corporate income taxes is enough to find Medicare and Medicaid
Explanation
The given answer suggests that the amount earned from corporate income taxes is not enough to fund Medicare and Medicaid. This implies that the statement is false and contradicts the accurate description of the data in the above graphs. The correct answer is explaining that the amount earned from corporate income taxes is not sufficient to cover the expenses of Medicare and Medicaid.
5.
Which of the following is an uncontrollable expenditure?
Correct Answer
C. Entitlement programs
Explanation
Entitlement programs are considered uncontrollable expenditures because their costs are determined by the number of eligible individuals and the benefits they are entitled to, rather than being easily controlled or adjusted by policymakers. Unlike discretionary expenses like national security, public education, highway systems, and energy research, entitlement programs have fixed eligibility criteria and benefit formulas that are difficult to change without significant legislative action. Therefore, entitlement programs are typically seen as more challenging to manage and control in terms of their costs.
6.
All of the following are steps in the budgetary process EXCEPT
Correct Answer
A. The Congressional Budget Office works closely with the president to finalize the budget that he will propose to Congress
Explanation
The explanation for the given correct answer is that the Congressional Budget Office (CBO) does not work closely with the president to finalize the budget that he will propose to Congress. The CBO is a non-partisan agency that provides objective analysis and information to Congress regarding the budget, economic trends, and fiscal policy. They do not have a direct role in working with the president to finalize the budget proposal.
7.
The federal government borrows money from citizens through
Correct Answer
B. Bonds
Explanation
The federal government borrows money from citizens through bonds. Bonds are a form of debt security where the government promises to pay back the borrowed amount with interest over a specified period of time. Citizens can buy these bonds and essentially lend money to the government, which it can then use for various purposes such as funding infrastructure projects or covering budget deficits. Bonds provide a way for the government to raise funds from the public and are considered a common method of financing government activities.
8.
What is one factor that has contributed most to the expansion of the government and, consequently, the budget deficit?
Correct Answer
E. National security
Explanation
National security has contributed the most to the expansion of the government and the budget deficit. This is because ensuring national security requires significant investments in defense, intelligence, and law enforcement agencies. These investments often lead to increased government spending and can contribute to a budget deficit if not balanced with sufficient revenue. Additionally, national security concerns can justify the expansion of government powers and the implementation of new policies and programs, further contributing to the growth of the government.
9.
The government recieves most of its revenues from
Correct Answer
C. Personal income taxes
Explanation
The government receives most of its revenues from personal income taxes. This is because personal income taxes are levied on the income earned by individuals, which includes salaries, wages, and other forms of income. These taxes are typically progressive in nature, meaning that individuals with higher incomes pay a higher percentage of their income in taxes. As a result, personal income taxes contribute significantly to the government's revenue and are an important source of funding for public services and programs.