Sources of Funding & Revenues (Weeks 1-2)

Question 1

Total amount of taxes, fees, and other sources of money a government receives in a given year

Answer 1

Revenues

Question 2

Total amount by which a government’s spending exceeds its revenues in a given year

Answer 2

Deficit

Question 3

Is a deficit a flow or stock

Answer 3

Flow

Question 4

Total amount of money paid out by a government in a given year

Answer 4

Spending

Question 5

When the government collects more money than it spends

Answer 5

Surplus

Question 6

The amount that a government owes to those who have loaned it money

Answer 6

Debt

Question 7

Is debt a flow or a stock

Answer 7

Stock

Question 8

When the amount the government spends equals the amount the government collects in a given year

Answer 8

Balanced budget

Question 9

Prices stated relative to a chosen year

Answer 9

Real prices

Question 10

Prices stated in today’s dollars

Answer 10

Nominal prices

Question 11

Measure of the average change over time in the prices paid by urban consumers for a market basket of consumer foods and services

Answer 11

Consumer price index

Question 12

Formula for converting real and nominal prices

Answer 12

real = nominal x (target year CPI / original year CPI)

Question 13

The percentage change in the price index from the proceding period

Answer 13

Inflation rate

Question 14

Inflation rate formula

Answer 14

inflation rate = (current CPI – previous CPI / previous CPI) x 100

Question 15

A tax levied to fund social insurance programs on earnings from work

Answer 15

Payroll tax

Question 16

Is the payroll tax a flat or progressive rate? Who pays?

Answer 16

Flat rate
Paid by both employers and employees on all earnings from work

Question 17

Is the individual income tax a flat or progressive rate? Who pays?

Answer 17

Progressive rate
Paid for by employees on all sources of income

Question 18

What are the three spending areas of the federal budget?

Answer 18

Entitlement or mandatory spending
Discretionary spending or optional
Interest on debt

Question 19

Is Medicare an insurance or assistance program? State or federal?

Answer 19

Insurance
Federal program

Question 20

Is Medicaid an insurance or assistance program? State or federal?

Answer 20

Assistance
Joint state and federal program

Question 21

What population does Medicare serve?

Answer 21

People over 65 no matter income;
Younger disabled people or dialysis patients

Question 22

What population does Medicaid serve?

Answer 22

All ages of low income

Question 23

When is the federal fiscal year?

Answer 23

October 1 of one year to September 30 of the next year

Question 24

Programs that help individuals and families whose incomes and/or assets fall below a pre-determined threshold, such as the poverty level

Answer 24

Means-tested entitlements

Question 25

What are the two main categories of means-tested entitlements?

Answer 25

Health programs (medicaid, medicare, CHIP, ACA) Income security programs (SNAP, WIC, SSI, EITC, CTC)

Question 26

Constitutional requirements or statutory rules that prohibit states from spending more than they collect in revenue

Answer 26

Balanced budget requirements

Question 27

What are the two main revenue sources for the federal government?

Answer 27

Income tax Payroll tax

Question 28

What are the three main sources of spending for the federal government?

Answer 28

Mandatory spending Discretionary spending Interest on debt

Question 29

What is the difference between mandatory spending and discretionary spending?

Answer 29

Mandatory spending is determined by the # of eligible individuals and discretionary spending is determined by the appropriation bills passed by congress

Question 30

What are the two main sources of revenues for state governments?

Answer 30

Taxation (general sales tax and income tax) Federal transfers (medicaid)

Question 31

What is the main source of spending for state governments?

Answer 31

Public welfare (any means tested program)

Question 32

What are the two main sources of revenue for local governments?

Answer 32

Property tax and sales tax State and federal transfers

Question 33

What is the main source of spending for local governments?

Answer 33

K-12 education

Question 34

Does KY create a biennial budget in even or odd years?

Answer 34

Even

Question 35

Is KY's General Assembly required to pass a balanced budget requirement?

Answer 35

Yes

Question 36

What is Kentucky's fiscal year?

Answer 36

July 1 one year to June 30 the following year

Question 37

What type of budget provides funds for all the programs and services of state government? It finances the day-to-day spending?

Answer 37

Operating budget

Question 38

What type of budget provides funds for capital investments such as buildings, information technology systems, and major items of equipment?

Answer 38

Capital budget

Question 39

Which fund is funded by most of the state's tax revenue?

Answer 39

General fund

Question 40

Which fund is funded by agency funds such as license fees, tuition, and other charges for services?

Answer 40

Restricted fund

Question 41

Which fund is funded by moneys received from the federal government for specified purposes?

Answer 41

Federal fund

Question 42

Which fund is funded by gas tax receipts, sales tax on automobiles, etc.

Answer 42

Road fund

Question 43

Which programs does payroll tax pay into?

Answer 43

Social Security Hospital insurance portion of Medicare (Medicare Part A)