Chapter 16 Government Spends, Collects, and Owes   1. We can examine the rate of government growth by analyzing the increase of __________     a) new government services.     b) the government's labor force.     c) the government's allocation of funds.     d) new government services and the government's labor force.   2. One of the reasons for the huge growth in government since the 1950s, according to economists, is that __________     a) as the nation grew richer, people demanded more government services to even out certain income inequities.     b) the Great Depression required the government to provide more services.     c) the government spent billions of dollars to finance World War II.     d) because the United States has grown in population over the last 50 years, more services are required.   3. Of the following public goods, only the federal government provides __________     a) public education.     b) roads.     c) national defense.     d) law-enforcement agencies.   4. Which is the following is NOT a way in which the government exercises its role in the area of demerit goods?     a) manufacturing them     b) taxing them     c) prohibiting them     d) regulating them   5. The government redistributes income through __________     a) social insurance programs and public education.     b) social insurance programs and public-assistance programs.     c) public education and worker's compensation.     d) social security and public education.   6. Criticisms of government involvement in the economy include all the following EXCEPT __________     a) public goods can and should be provided by private organizations.     b) government assistance discourages personal progress.     c) government regulations raise the prices of goods and services being produced.     d) people are not deserving of public assistance.   7. The federal budget-making process does NOT include __________     a) approval by the voters.     b) presidential approval of budget requests by the various departments and agencies.     c) presidential submission to Congress.     d) congressional review through the use of committees and subcommittees.   8. The federal government's largest expenditures include all EXCEPT __________     a) national defense.     b) education.     c) health care.     d) interest on the national debt.   9. By far, the largest single expenditure for state and local governments is __________     a) national defense.     b) police and fire departments.     c) education.     d) public welfare.   10. When the government spends more than it takes in, the government must raise extra funds through borrowing. This situation is called __________     a) deficit financing.     b) balancing the budget.     c) buying on credit.     d) overdraft spending.   11. Which situation describes the benefits-received principle of taxation?     a) a gasoline tax to pay for highway construction and repair     b) taxes on imports     c) property taxes to pay for local public schools     d) federal taxes to pay for public goods   12. The ability-to-pay principle of taxation is based on the idea that __________     a) people with lower incomes can afford to pay more taxes than those with higher incomes.     b) people with higher incomes can afford to pay more taxes than those with lower incomes.     c) because people with lower incomes use more government services, they should pay more taxes to support the services.     d) because people with higher incomes use more government services, they should pay more taxes to support the services.   13. Our federal individual income tax system is an example of which form of taxation?     a) proportional tax     b) progressive tax     c) regressive tax     d) benefits-received tax   14. A state sales tax on food __________     a) is a progressive tax that hits higher-income families the hardest.     b) is a proportional tax.     c) hits middle-income families the hardest.     d) is a regressive tax that hits lower-income families the hardest.