Question 1 4 pts
(TCO A) Which of the following statements describes the
relationship among federal, state, and local governments?
Local
governments are closest to the people and have all governmental powers not
expressly prohibited by the U.S. Constitution.
States
are creatures of the federal government and only have those powers expressly
granted to them by the federal government.
Local
governments are creatures of their state government and have only those powers
granted to them by the state.
The
federal government has residual powers that are not granted to state and local
governments or not expressly prohibited by them.
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Question 2 4 pts
(TCO A) Logrolling is the process where:
one
legislator trades a vote on one issue in exchange for the vote of another
legislator on a separate issue.
campaign
contributions are used to secure a legislator’s vote on a particular issue.
media
campaigns are initiated by special interest groups to sway public opinion on an
issue.
an
appropriation is made to fund localized projects secured solely or primarily to
bring money to a representative’s district.
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Question 3 4 pts
(TCO B) Current-dollar government purchases were $1,500
billion in 2010. With 2000 as the base year, assume the price deflator for 2010
is 175 (or, 1.75 if you don’t multiple by 100). In real dollars, the year 2000
government purchases would be which of the following (rounded to the nearest
billion)?
$714
billions
$857
billions
$1750
billions
$2188
billions
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Question 4 4 pts
(TCO C) The largest portion of local government expenditures
is:
police
and corrections.
health
and human services.
the
mayor’s office.
elementary
and secondary education.
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Question 5 4 pts
(TCO C) Appropriation to the State Library System (fiscal
year starts July 1) for fiscal year 201x was $24,000,000.
Quarterly allotments were as follows:
Q1 – $5,750,000
Q2 – $7,000,000
Q3 – $5,250,000
Q4 – $6,000,000
On December 31, 201X, budget reports showed expenditures of
$12,500,000 and encumbrances of $800,000. Taking encumbrances into
consideration, what is the status of Library System spending as of December 31?
Operations
were fully consistent with plan
Over
plan by $550,000
Under
plan by $550,000
Under
plan by $650,000
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Question 6 15 pts
(TCO B) List and identify the five most common reasons for
requesting funds.
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Question 7 15 pts
(TCO A) Name and describe the major steps in the executive
budget preparation process.
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Question 8 20 pts
(TCO B) Here are the annual personal benefits of a proposed
Dog Romp Zone (DRZ) as perceived by Ann (A), Bob (B), and Chris (C):
Individual Annual
Benefit
Ann $500
Bob $250
Chris $200
The overall annual total cost of the DRZ is $900.
Does the DRZ represent a potential Pareto improvement?
Incorporating numbers into your answer, say why or why not. (4 points)
Suppose each individual will be assessed an equal share of
the annual total cost. Will the project be approved in a majority-rule voting
process? Incorporating numbers into your answer, explain why or why not. (8
points)
Devise a cost-allocation scheme for A, B, and C that would
ensure passage of the proposal in a majority-rule voting process. Explain why
your scheme would work. (8 points)
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Question 9 20 pts
(TCO B) Distinguish clearly and carefully between each
element of the five pairs of federal budget terms:
Budget Authority
(BA) vs. Budget Outlay (BO)
Contract Authority
vs. Borrowing Authority
No-Year Authority
vs. Annual Authority
Rescission vs.
Deferral
Mandatory Spending
vs. Discretionary Spending
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Question 10 20 pts
(TCO C) A community wants to invest in new sewage treatment
technology. It is estimated that the cost of operating the system will be
$2,000,000 per year after a one-time installation cost of $5,000,000 is
incurred. The construction period will be one year. Once the plant is
constructed and in operation, community benefits are estimated at $4,000,000
per year. The system would be financed by a property tax increment placed on
the business and residential sectors. (6 points)
Without considering interest rates and discounting, how long
will it take for the community to “break even” on this venture? SHOW
ALL WORK. (4 points)
What might be defensible logic behind using the property tax
for the financing mechanism as compared to, say, a sales tax? (4 points)
Write a brief one-paragraph budget justification to support
this project. [NOTE: I refer to the statement on page 175 of the text, to
wit:”Well-developed budget justifications are the key to successful agency
budget requests.”] (4 points)
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