Question

Question text

A budget deficit occurs when government receipts are less than spending and a budget surplus occurs when government spending is less than receipts.

Select one:

True

False

Question 29

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An advantage of a consumption tax over the present income tax system is that a consumption tax discourages consumption and encourages saving.

Select one:

True

False

Question 30

One of the largest categories of U.S. federal government spending is Social Security and it is growing because the elderly population is increasing due to longer life expectancy for U.S citizens.

Select one:

True

False

Answer 1

A budget deficit occurs when government receipts are less than spending and a budget surplus occurs when government spending is less than receipts: True, Deficit happens when spending is exceeded by income and surplus is when income is exceeded by spending.

An advantage of a consumption tax over the present income tax system is that a consumption tax discourages consumption and encourages saving: True, since people will know that they are being taxed on consumption rather than income, they will be motivated to save more.

One of the largest categories of U.S. federal government spending is Social Security and it is growing because the elderly population is increasing due to longer life expectancy for U.S citizens: True, Social security accounts for the largest spending by federal government.