Gottheil Quiz: Government Spending

Quiz
Government Spending

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1. Which of the following statements correctly characterizes pure public goods?: a. These goods generate positive externalities to such an extreme degree that literally every member of society can enjoy their benefits at the same time.
b. These goods generate negative externalities to such an extreme degree that literally every member of society is adversely affected by them.
c. These goods, by their very nature, cannot be produced by private firms.
d. These goods must be produced by government because of the free rider problem.
e. All of the above statements are correct.

2. Goods that provide nonexclusive and nonrival benefits to all members of society are called: a. inferior goods.
b. merit goods.
c. normal goods.
d. public goods.
e. superior goods.

3. The property of a pure public good that makes it physically impossible or extremely costly to exclude any individual from the enjoyment of the good once a given amount of it has been produced is called: a. the free rider problem.
b. the logrolling problem.
c. nonexcludability.
d. nonrivalness.
e. privatization.

4. The property of a pure public good that allows additional persons to consume the good without reducing the good's availability to others is called: a. an internality.
b. nonexcludability.
c. nonrivalness.
d. privatization.
e. the voting paradox.

5. Typical examples of pure public goods include: a. national defense.
b. postal service.
c. public libraries and museums.
d. unemployment insurance.
e. veterans' hospitals.

6. Typical examples of pure public goods include: a. cemeteries.
b. public buses.
c. public housing.
d. public universities.
e. none of the above.

7. Which of the following may well be regarded as a pure public good?: a. nonscrambled radio and television broadcasts.
b. fireworks displays.
c. the town hall clock.
d. city-wide mosquito control.
e. all of the above.

8. Which of the following are characteristics of merit goods?: a. Merit goods, unlike pure public goods, are nonexclusive, but are not nonrival.
b. Merit goods, unlike pure public goods, are nonrival, but are not nonexclusive.
c. Merit goods, unlike pure public goods, can be provided by the private market.
d. Merit goods, like pure public goods, cannot be provided by the private market.
e. None of the above.

9. Transfer payments represent a redistribution of income from taxpayers to specific groups, such as: a. welfare recipients.
b. the unemployed.
c. retired people.
d. farm producers.
e. any of the above.

10. In the United States of the mid-1990s, total government spending (federal state, and local) came to about: a. $1,000 billion per year.
b. $2,500 billion per year.
c. $3,500 billion per year.
d. $4,128 billion per year.
e. $4,500 billion per year.

11. In the United States of the mid-1990s, federal government spending constituted about which percentage of total (federal, state, and local) spending?: a. 25%.
b. 35%.
c. 45%.
d. 55%.
e. 65%.

12. In the mid-1990s, the national defense took roughly which percentage of U.S. federal government spending?: a. 10%.
b. 18%.
c. 26%.
d. 34%.
e. 39%.

13. Looking at U.S federal government spending in the mid-1990s, we find income support, social security, and welfare payments taking about: a. one fifth as many dollars as national defense.
b. one third as many dollars as national defense.
c. one half as many dollars as national defense.
d. three times as many dollars as national defense.
e. ten times as many dollars as national defense.

14. In the mid-1990s, U.S. federal government spending on the space program took roughly what percentage of total federal government spending?: a. less than 1%.
b. 2.5%.
c. 5.0%.
d. 7.5%.
e. None of the above.

15. In the mid-1990s, U.S. federal government spending on goods and services took roughly what percentage of total federal government spending?: a. 17%.
b. 27%.
c. 37%.
d. 47%.
e. 77%.

16. The 1996 Personal Responsibility and Work Opportunity Reconciliation Act: a. reformed the U.S. public assistance program.
b. abolished the U.S. public assistance program.
c. gave then current welfare recipients an unconditional right to welfare benefits.
d. abolished food stamps and Medicaid.
e. is correctly described by (a), (c), and (d).

17. The U.S. Social Security System: a. provides benefits, subject to eligibility, to the elderly, the disabled, and their dependents.
b. was established in 1935, but expanded in the 1950s and 1960s.
c. includes a health insurance program, called Medicare, that is applicable to everyone over 65 years old.
d. is correctly described by all of the above.
e. is being confused with the Medicaid program in all of the above statements.

18. In the mid-1990s, as a percentage of the GDP, social security benefits in Western Europe ranged from 13.7 in Germany to 19.7 in the Netherlands. In contrast, the U.S percentage was about: a. 2.
b. 5.
c. 8.
d. 25.
e. 33.

19. During the 1970-1996 period, total government spending in the United States: a. rose continuously from 17% to 55% of the U.S. GDP.
b. fell continuously from 55% to 17% of the U.S. GDP.
c. remained almost unchanged at about 17% of the GDP.
d. remained almost unchanged at about 33% of the GDP.
e. quadrupled, when measured in constant dollars.

20. Which of the following statements about government spending is false?: a. In a fully employed economy, increased government spending on goods and services has a clear opportunity cost: decreased private spending on goods and services.
b. In a fully employed economy, increased government transfer payments have a clear opportunity cost: decreased private spending on goods and services.
c. In the United States of the mid-1990s, almost 40% of state and local government spending went for education.
d. Measured as a percentage of the GDP, total government spending in the 1990s was vastly smaller in the United States than in France.
e. None of the above statements is false.