7.3 Quiz

What are the two main types of government spending? (Government Spending)

• Capital and operational spending

• Domestic and international spending

• Mandatory and discretionary spending

• Public and private spending

What is the purpose of gift taxes? (Paying for Government)

• To encourage giving property away

• To avoid paying estate taxes by giving away property before death

• To increase federal revenue

• To tax all gifts regardless of value

What is a source of nontax revenue mentioned in the document? (Paying for Government)

• Income tax

• Sales tax

• Entrance fees at national parks

• Property tax

Who begins the creation of the federal budget? (The Budget Process)

• Congress

• The Senate

• The President

• The Supreme Court

What is the effect of increasing taxes, government spending, and borrowing money? (Fiscal and Monetary Policy)

• Stabilizes the economy

• Causes the economy to shift

• Decreases inflation

• Reduces unemployment

What does monetary policy involve altering? (Fiscal and Monetary Policy)

• Tax rates

• Trade tariffs

• Amount of money in circulation and interest rates

• Government spending

What does the government spend and borrow each year? (Fiscal and Monetary Policy)

• Less than it takes in

• More than it takes in

• A similar amount to what it takes in

• Nothing

What can happen to the economy if borrowing rates rise?

• The economy can slow down

• The economy can grow rapidly

• Inflation decreases

• Consumer spending increases

In what year was the Federal Reserve System created? (Monetary Policy)

• 1905

• 1913

• 1929

• 1945

How long might it take for changes in fiscal and monetary policy to take effect? (Monetary Policy)

• Immediately

• A few days

• Several months

• A few hours