Chapter 30 Government Budgets

*Ch30 Government Budgets*

*Multiple Choice Questions*

*1.* If South Dakota’s governor reports a budget surplus in 2011, that state government likely:

A. received more in taxes than it spent in that year.
B. increased the proportional tax level.
C. equalized spending and taxes in that year.
D. increased the corporate income tax rate.

Answer: A Reference:

Explanation:

Type: Multiple Choice

*2.* If the state of Washington’s government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a:

A. budget deficit.
B. budget surplus.
C. decrease in payroll tax.
D. decrease in proportional taxes.

Answer: B Reference:

Explanation:

Type: Multiple Choice

*3.* If the government for the state of Washington collects $65.8 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be:

A. an increase in payroll tax.
B. an increase in excise tax.
C. a budget surplus.
D. a budget deficit.

Answer: D Reference:

Explanation:

Type: Multiple Choice

*4.* A ______________________ is created each time the federal government spends more than it collects in taxes in a given year.

A. budget deficit
B. budget surplus
C. corporate tax
D. regressive tax

Answer: A Reference:

Explanation:

Type: Multiple Choice

*5.* A ______________________ means that government spending and taxes are equal.

A. fiscal budget
B. balanced budget
C. contractionary fiscal policy
D. discretionary fiscal policy

Answer: B Reference:

Explanation:

Type: Multiple Choice

*6.* A __________________________ policy will cause a greater share of income to be collected from those with high incomes than from those with lower incomes.

A. proportional tax
B. regressive tax
C. progressive tax
D. excise tax

Answer: C Reference:

Explanation:

Type: Multiple Choice

*7.* A ________________________________ is calculated as a flat percentage of income earned, regardless of level of income.

A. progressive tax
B. regressive tax
C. proportional tax
D. estate and gift tax

Answer: C Reference:

Explanation:

Type: Multiple Choice

*8.* When the share of individual income tax collected by the government from people with higher incomes is smaller than the share of tax collected from people with lower incomes, then the tax is ____________________.

A. optional
B. proportional
C. progressive
D. regressive

Answer: D Reference:

Explanation:

Type: Multiple Choice

*9.* In 2010, Microsoft will pay corporate income tax to the federal government based on the company’s __________________.

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