Download Unit 6 – Government Finances Test Review

Unit 6 – Government Finances
Block Class Pacing
Unit Essential Question
1) How does the government try to influence the economy?
Day 1

Economics Document - Government Budgeting & Spending

Review Government Spending & Budgeting
Day 2

Economics Document - Federal & State Government Revenue &
Expenditures

Review - Federal & State Government Revenue & Expenditures
Day 3

Principles & Types of Taxation

How Income Taxes Affect the Economy
Day 4

Unit 6 Test Review Government Finances

Unit 6 Test Government Finances
Unit 6 – Government Finances: Fiscal Policy, Taxing and Spending
NCSCOS 2.08, 3.08, 3.09, 5.05, 8.08, 9.07
Chapter 25, Section 1 (pgs. 677-680)
1. How does the federal government prepare its budget? Prepared by the
______________________________ and approved by _____________________
2. Government spending is divided into two types:
a. Mandatory spending _________________________________________
i. Examples _____________________________________________
b. Discretionary spending _______________________________________
i. Examples _____________________________________________
3. What is a appropriations bill? _________________________________________
__________________________________________________________________
4. What is the federal government’s budget year? ____________________________
5. Where does the government get its money? ______________________________
6. Identify each of the following forms of taxation:
Type of Taxation
Description
Examples
Progressive Tax
Regressive Tax
Proportional Tax
7. Federal Government revenue (2007)
Source of Federal Revenue
Individual Income Tax
Payroll Tax
Corporate Profits Tax
Other
Percentage of Federal Revenue
45.5%
36.6%
10.8%
7.2%
8. Federal Government Expenditures (2007)
Source of Federal Expenditures
Percentage of Federal Expenditures
Social Security
21.2%
National Defense
17.4%
Income Security
14.0%
Medicare
13.5%
Health
10.5%
Interest on the Debt
8.2%
Other
15.2%
Chapter 25, Section 2 (pgs. 682-685)
9. From the pie charts answer the following questions:

According to the graphs what is the largest source of revenue for state
governments? _____________________________________________________
 What is the largest source of local revenue? ______________________________
 What tax brings in the most money for:
o State Governments ___________________________________________
o Local Governments ___________________________________________
 What is the number one expense for state governments? ____________________
 What is the number one expense for local governments? ____________________
 Which level of government is most responsible with funding education?
_________________________________________________________________
10. What does intergovernmental revenue mean?
__________________________________________________________________
11. What services do local governments provide with the revenue they take in?
__________________________________________________________________
__________________________________________________________________
12. What are entitlement programs? ______________________________________
__________________________________________________________________
Chapter 25, Section 3 (pgs. 688-692)
13. When the government spends more than it collects in revenue it has a
_____________ and when it collects more than it spends it has a _____________.
14. How does the federal government borrow money to help pay for services it
doesn’t have the money to pay for? _____________________________________
15. What is the national debt? ___________________________________________
__________________________________________________________________
16. What is the current national debt of the United States? ______________________
17. What is the impact of the national debt?
a. Interest _____________________________________________________
____________________________________________________________
b. Interest Rates ________________________________________________
____________________________________________________________
18. What is a balanced budget? __________________________________________
__________________________________________________________________
19. What are the two ways the government can try and reduce the national debt?
a. ____________________________________________________________
b. ____________________________________________________________
Why is it sometimes necessary for the federal government to go into deficit spending?
_________________________________________________________
__________________________________________________________________
Unit 6 – Government Finances Test Review
Test Format

10 Multiple Choice

20 Matching
Info to Know

budget – balanced budget, budget surplus, budget deficit

national debt

types of taxation (progressive, regressive, proportional)

Federal Taxes (revenue) – income (#1 source), payroll,
social security, excise tax

State Taxes (revenue) – intergovernmental revenue (#1 source),
sales tax, income tax

Local Taxes – intergovernmental revenue (#1 source), property tax

mandatory spending, discretionary spending

fiscal policy, fiscal year

Levels of Government – Major Services Provided

Bonds
How Income Taxes Affect the Economy
Below you will find the 2008 Federal Income Tax Brackets. This shows the
percentage of tax that single and married citizens pay the federal government on their
income. Use the table below to do this sheet, and see how taxes impact the individual
and the economy as a whole. In doing the math, each part of your income is taxed as
it applies to the tax bracket. For example a single person earning $30,000 would pay
10% on the first $8,025 which is $802.50, and 15% on the remaining $21,975 which
is $3,296, for a total of $4,098.50 in federal income tax.
Use Single Bracket to calculate Income Tax amounts.
2008 Federal Income Tax Brackets
Tax Rate
Single
Married Filing Jointly
10%
Not over $8,025
Not over $16,050
15%
$8,025-$32,550
$16,050-$65,100
25%
$32,550-$78,850
$65,100-$131,450
28%
$78,850-164,550
$131,450-$200,300
33%
$164,550-$357,700
$200,300-$357,700
35%
Over $357,700
Over $357,700
Directions: Calculate the income tax paid using the single income bracket.
1) $40,000 2) $15,000 3) $60,000 4) $300,000 –
What might happen to the US economy if people were able to keep more of their
income? Tell how each of these areas would be impacted.
1) Demand for products and services
2) Unemployment
3) Savings Accounts