MULTIPLE-CHOICE QUESTIONS

1.Which is not a fiscal policy tool?

a.Government expenditures

b.Tax policy

c.Regulating the money supply

d.Tax deductions

e.Taxation

2.Which of the following was NOT true regarding the period 1866-1900?

a.The national government's authority to regulate the economy was greater than in 1850-1861.

b.Government involvement in the private economy became more extensive than merely regulating the flow of interstate commerce.

c.Theodore Roosevelt expanded presidential prerogatives.

d.The executive budget was created.

3.The legislature is not directly involved in which step of the budgetary cycle?

a.Appropriations

b.Audit

c.Authorization

d.Execution

e.Preparation

4.During which step of the budgetary cycle is power given to incur financial obligations?

a.Appropriations

b.Audit

c.Authorization

d.Execution

e.Preparation

5.Which budgetary approach requires the budget agency to adopt a policy role, is characterized by a systematic policy-making style, and has a scope that includes inputs, outputs, effects, and alternatives?

a.Incremental budget making

b.Line-item budgeting

c.Performance budgeting

d.Planning-programming budgeting (PPB)

e.Zero-base budgeting (ZBB)

6.Which of the following has NOT occurred as a result of the Congressional Budget Act of 1974?

a.Better management of budget-making conflict within Congress

b.Acceptance within Congress of the congressional budget process as a regular part of decision making about spending

c.Increased congressional dependence upon the Office of Management and Budget for financial data and advice

d.Reduced growth in the number of "entitlement" programs

7.Which type of committee is responsible foroverseeing annual budgets in their entirety?

a.Appropriations committees

b.Budget committees

c.Oversight committees

d.Tax-legislation committees

8.An agency directly involved in administering monetary policy is the

a.Federal Reserve Board.

b.General Accounting Office.

c.Office of Management and Budget.

d.none of the above.

9.The first actions for budgetary reform were taken at what level of government?

a.Local

b.State

c.National

d.Regional

10.Which of the following established a mandatory deadline for a balanced budget?

a.Congressional Budget Act

b.Economic Stabilization Act

c.Gramm-Rudman-Hollings Act

d.Sunset laws

11.Total debt in the United States dramatically increased during the Bush Administration (2001-2009), while the size of the federal government

a.remained the same.

b.increased.

c.decreased.

d.fluctuated.

12.Budgets can be used as guidelines for counting and recording income and expenditures; many fiscal and other public-policy functions can also be served through budgeting, including

a.keeping aledger.

b.revealing information about government spending.

c.statements of financial intent.

d.estimates of anticipated income and expenditures.

e.all of the above.

13.According to some economists, the "Great Recession" ended in

a.June 2009.

b.July 2008.

c.September 2009.

d.June 2008.

TRUE-FALSE QUESTIONS

1.The Commission on Economy and Efficiency was established in an attempt to reduce the number of federal agencies created during World War II by former President Herbert Hoover in 1947.

2.Less than half of all national government expenditures during the 1980s were classified as "uncontrollable."

3.After both the Civil War and World War II, national government expenditures declined from their wartime peaks but remained significantly higher than prewar levels.

4.The creation of the Executive Office of the President coincided with the rise of performance budgeting.

5."Ripple effects" are most important in connection with government decisions regarding debt management.

6.Throughout most of U.S. history, budgeting has been incremental.

7.Tax breaks have grown to the point that if we were to eliminate all of those currently in existence we also could all but eliminate annual budget deficits.

8.Budget making at the national, state, and local levels is characterized by institutional and political centralization.

9.Since the mid-1970s, total revenues (national plus state plus local) have declined while costs have increased, leading to increased competition among governments, deficit spending, and "cutback management."

10.U.S. government spending increased 75 percent from fiscal year (FY) 2005 to FY 2007.

11.As a U.S. Senator, Republican presidential candidate John McCain often voted for increased entitlement spending.

12.From 1998-2002, federal government revenues exceeded expenditures.

13.The three general patterns in the budgetary history are presidential expansion, government involvement in private sector, and congressional debate.