Question 1 (multiple choice)
which type of discretionary spending usually has wide support?

spending that provides health care
spending that a specific group
spending associated with entitlement programs
spending that a large group
question 2 (multiple choice)
which accurately describes a 401(k) plan?

us government securities purchased as a group through an investment firm
an iou issued by the government promising a fixed rate of return
a security that represents part ownership of a company
a tax deferred retirement plan offered by employers
question 3 (multiple choice)
what is true about the united states national debt?

it has resulted in significant cuts to social security and medicare.
it was the cause of the 2008 housing market crash.
it leads to rapid inflation and rising unemployment.
it requires the government to pay large yearly interest payments.
question 4 (multiple choice)
which is an argument against the use of the ability-to-pay principal of taxation?

it reduces the incentive to work hard and take risks to succeed.
people who earn more money have benefitted more from society.
it is difficult to determine who receives benefits from government spending.
people are not willing to pay unless they receive something in return.
question 5 (multiple choice)
why does money need to be in limited supply?

to prevent counterfeiting
it is tied to commodities
to protect its value
it is tied to gold
question 6 (multiple choice)
read the sentence.

the government decides to raise taxes to spend more on programs.

what effect will this most likely have on the economy?

raising taxes will decrease the market price equilibrium.
raising taxes will decrease aggregate demand.
raising taxes will increase inflation.
raising taxes will increase aggregate demand.
question 7 (multiple choice)
what is true regarding transfer payments?

they do not result in the purchase of a good by the federal government.
they are used to purchase goods for the federal government.
they are not used to provide services from the state governments.
they are used by state governments to send money to the federal government.
question 8 (multiple choice)
what is the result of government spending on higher education?

public universities are able to operate while running yearly deficits.
private universities lack research-based programs compared to public universities.
private universities have lower tuition rates than do public universities.
public universities have lower tuition rates than do private universities.
question 9 (multiple choice)
what is true regarding tax revenue at the state level?

many states rely on social security taxes to generate revenue.
many states rely on medicare taxes to generate revenue.
many states rely on sales taxes to generate revenue.
many states rely on excise taxes to generate revenue.
question 10 (multiple choice)
read the sentences.

an important function of money is to act as a store of value. gold is excellent as a store of value.

what is a difficulty with using gold as money?

it is not widely acceptable to people.
it can deteriorate quickly.
it is difficult to divide into smaller units.
it is impossible to transport easily.
question 11 (multiple choice)
what is automatic bill pay?

a system banks use to ensure that people pay the fees they owe for account overdrafts
a system the government uses to make sure people pay their property taxes
a system people can use to have their bills paid each month from their bank account
a system companies use to receive past-due funds that people owe
question 12 (multiple choice)
read the scenario.

kim received a small raise at work so that her salary went from $58,000 per year to $60,000 per year. she is concerned that it might move her to the next tax bracket.

why would kim be concerned about that?

if she moves into another bracket, she will no longer receive a tax return.
if she moves into another bracket, she can no longer use the 1040ez.
if she moves into another bracket, she would be forced by law to use an accountant to file taxes.
if she moves into another bracket, she will pay a higher percentage for a portion of her taxes.
question 13 (multiple choice)
how does the federal debt impact the economy?

it can slow growth by decreasing the tax rate.
it can slow growth by decreasing the cost to borrow money.
it can slow growth by decreasing consumer confidence.
it can slow growth by preventing inflation.
question 14 (multiple answer)
what are the purposes of financial intermediaries?

(select all that apply.)

enable people to day-trade stocks and bonds
enable people to store money in a safe place
enable people to purchase a certificate of deposit (cd)
enable people to earn a profit storing money

1. Ibelieve the answer is spending that helps a large group. Approximately 30% of the federal government is in discretionary spending, which is an option part of fiscal policy in contrast to entitlement programs for which funding is mandatory and determined by the number of eligible recipients. Examples of areas funded by discretionary measures include, national defense, foreign aid, education and transportation. 

2. I think the answer is a tax deferred retirement plan offered by employees. A 401(k) is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account.

3. I think the answer is that it has resulted in significant cuts to social security and medicare. The national debt of the united states is the net accumulation of the federal government's annual budget deficits: it is the total amount of money that the U.S federal government owes to its creditors.

4. I believe the answer is that it reduces the incentive to work hard and take risks to succeed. Ability to pay taxation is a progress taxation principle that maintains that taxes should be levied according to tax payers ability to pay. This progressive taxation approach places an increased tax burden on individuals, partnerships, companies, corporations, trusts and certain estates with higher incomes.

5. I believe the answer is in order to protect its value. In order to maintain its value, money must have a limited supply. This means that restrictions on the amount of money in circulation ensure that values remain relatively constant  for the currency. 

6. I think the correct answer is that raising taxes will decrease aggregate demand. This is because an increase in taxation would cause a decrease in consumers spending because workers and employees are poor off. Since the consumer spending is a component of of aggregate demand, then the decrease in consumer spending will cause a decrease in aggregate demand leading to lower economic growth.

7. I believe the correct answer is that transfer payment do not result into purchase of a good by the federal government. Transfer payments is a one way payment to an individual for which no money, good or service is given or exchanged. They are made to individuals by the federal government through various social benefit programs (welfare programs such as social security, old age or disability pensions, students grants etc.)

8. I believe the answer is that the Public universities have lower tuition rates than do private universities. This is because the government spending on education by provision of student loans, subsidies and scholarship to students would prompt public schools to charge less amount of tuition fee as they are receiving funds from the government.

9. I believe that many states rely on sales taxes to generate revenues. The sales taxes includes both general sales and selective sales taxes. States have no direct personal ta and do not collect a sales tax at the state level, although it allows the local government to collect their own sales taxes. 

10. I believe the answer is that it is difficult to divide it into small units, unlike money which can be divide into different small units. Gold may be used as a good measure or store of cash with benefits such as unlike cash its interest rates remain low, having long term stability and also not being a flat currency, however gold can be divided into small portions like cash.

11. The correct answer is that this is a system people can use to have their bills paid each month from their bank account. An automatic bill payment is a money transfer scheduled on a predetermined date to pay a recruiting bill. It is important to note that these are routine payments made from a banking account, brokerage or mutual fund account to vendors.

12. I believe the concern is because if he moves to another tax bracket, she will pay a higher percentage for a portion of her taxes. Normally taxes levied on an income of an individual increases with the amount of income earned. highly paid individuals pay higher taxes as income taxes is proportional to the amount of income earned

13. I believe the answer is that it can slow growth by decreasing consumer confidence.  In the short run the economy and voters benefit from deficit spending. it drives economic growth. However over the long term, as the debt-to-GDP ratio increases, debt holders could demand larger interests payments. There would be increased interest rate by the treasury which would slow the economy.

14. i think the answer is the financial intermediaries enables people to save or store money in a safe place. Financial intermediaries are entities that act as middlemen between two parties in a financial or business transaction. They include commercial banks, building societies, investments banks, mutual funds among others. They holds funds from lenders and then make loans to borrowers.