Chapter 1: Introduction to Public Finance in Canada
Multiple Choice
1. Public finance
A) is not like public economics.
B) develops principles for understanding the economic role of government.
C) only works for local and state governments.
D) is all of the above.
Ans: b
2. A regulatory budget would
A) provide an accounting of government regulation.
B) be difficult to compute.
C) have to be attempted unofficially.
D) be all of the above.
Ans: d
3. The federal government
A) is the largest taxing entity in the country.
B) is only concerned with international issues.
C) spends heavily on net interest.
D) is all of the above.
Ans: a
4. State and local governments receive the largest amount of revenue from
A) personal income taxes.
B) property taxes.
C) sales taxes.
D) payroll taxes.
Ans: c
5. The federal government gets most of its revenue from
A) personal income taxes.
B) property taxes.
C) sales taxes.
D) payroll taxes.
Ans: a
, 6. In a pure market economy,
A) there is no role for government.
B) government intervention might be needed.
C) large markets where people meet to buy and sell are required.
D) all of the above.
Ans: b
7. A government good or service includes
A) bridges.
B) parks.
C) national defense.
D) all of the above.
Ans: d
8. Government output is hard to account for because government
A) is so large.
B) provides goods that have no resale value.
C) keeps secrets about what it produces.
D) goods are generally not sold or produced in easily measurable units.
Ans: d
9. Economists who study the role of government in the market
A) agree mostly on the role that the government should play.
B) study for market problems that the government might help solve.
C) find that supply and demand graphs never work for the government.
D) do none of the above.
Ans: b
10. Economics
A) started as a business application
B) can never be defined.
C) is the study of unlimited wants but limited resources.
D) has no “real world” relevance.
Ans: c
11. Taxes
A) are mandatory payments.
B) are necessary for financing government expenditures.
C) do not directly relate to the benefit of government goods and services received.
D) are all of the above.
Ans: d
Multiple Choice
1. Public finance
A) is not like public economics.
B) develops principles for understanding the economic role of government.
C) only works for local and state governments.
D) is all of the above.
Ans: b
2. A regulatory budget would
A) provide an accounting of government regulation.
B) be difficult to compute.
C) have to be attempted unofficially.
D) be all of the above.
Ans: d
3. The federal government
A) is the largest taxing entity in the country.
B) is only concerned with international issues.
C) spends heavily on net interest.
D) is all of the above.
Ans: a
4. State and local governments receive the largest amount of revenue from
A) personal income taxes.
B) property taxes.
C) sales taxes.
D) payroll taxes.
Ans: c
5. The federal government gets most of its revenue from
A) personal income taxes.
B) property taxes.
C) sales taxes.
D) payroll taxes.
Ans: a
, 6. In a pure market economy,
A) there is no role for government.
B) government intervention might be needed.
C) large markets where people meet to buy and sell are required.
D) all of the above.
Ans: b
7. A government good or service includes
A) bridges.
B) parks.
C) national defense.
D) all of the above.
Ans: d
8. Government output is hard to account for because government
A) is so large.
B) provides goods that have no resale value.
C) keeps secrets about what it produces.
D) goods are generally not sold or produced in easily measurable units.
Ans: d
9. Economists who study the role of government in the market
A) agree mostly on the role that the government should play.
B) study for market problems that the government might help solve.
C) find that supply and demand graphs never work for the government.
D) do none of the above.
Ans: b
10. Economics
A) started as a business application
B) can never be defined.
C) is the study of unlimited wants but limited resources.
D) has no “real world” relevance.
Ans: c
11. Taxes
A) are mandatory payments.
B) are necessary for financing government expenditures.
C) do not directly relate to the benefit of government goods and services received.
D) are all of the above.
Ans: d
