Public Finance Test Questions with Correct Answers 100% Pass

Public Finance Test Questions with Correct Answers 100% Pass Circular Flow Model - Answers how goods, services, resources, and money flow back and forth in an economy Decision making groups - Answers households, firms, government Monetary payments flow to the government from - Answers households and businesses Receive transfer payments and subsidies from the government - Answers households and firms Transfers and subsidies - Answers payments the government makes to households and businesses that do not require an exchange of productive activity Net taxes - Answers difference between taxes and transfer payments and subsidies Correctly represents the net flow of monetary payments reaching the government - Answers net taxes Receive goods and services in exchange for the net taxes they pay - Answers households and firms How the government provides goods and services - Answers they use net taxes to make monetary payments or expenditures in the resource and product markets Types of government - Answers federal, state, and local Main sources of income for the FEDERAL GOVERNMENT - Answers -individual income taxes -social insurance -retirement receipts -corporation income taxes -excise taxes Most FEDERAL spending concentrates in 4 areas - Answers 1. pensions and income security 2. health 3. national defense 4. interest on national debt Main sources of income for STATE GOVERNMENT - Answers -sales taxes -excise taxes -state individual income taxes -state corp income taxes STATE GOVERNMENT spending goes to - Answers -education -public welfare programs -health -infrastructure Some states that do not have individual income taxes supplement their income through - Answers the use of federal grants and state run lotteries Main sources of income for LOCAL GOVERNMENT - Answers -property taxes -sales taxes -excise taxes LOCAL GOVERNMENT spending goes to - Answers -education