PUBLIC POLICY & ECONOMICS

Ace Practice Test

I. BASIC GOVERNMENT GOALS :  CONSTITUTION PREAMBLE

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    A.    NATIONAL SECURITY

    B.    ORDER IN SOCIETY

    C.    GENERAL WELFARE

II. ECONOMIC THEORIES

    A.    LAISSEZ FAIRE

    B.    KEYNESIANISM (ADOPTED BY NEW DEAL)

    C.    MONETARISM  (MILTON FRIEDMAN)

    D.    SUPPLY SIDE ECONOMICS

III. BUDGETING

    A.    THE EXECUTIVE BUDGET

    B.    THREE ELEMENTS

        1. AUTHORITY

        2. RECEIPTS

        3. EXPENDITURES

    C.    PROCESS

        1. OMB

        2. CBO

        3. CONGRESSIONAL ACTION

    D.    CHARACTERISTICS

        1. NON-RATIONAL/POLITICAL PROCESS

        2. "SMOKE" & "MIRRORS" SYNDROME

IV. TAXATION (Why Taxes Matter)

    A.    PURPOSES

        1. RAISE REVENUE

        2. REDISTRIBUTE PROPERTY &

                RESOURCES

        3. REGULATE ECONOMIC ACTIVITY

        4. IMPACT SPECIFIC ACTIVITIES

    B.    TYPES OF TAXES

        1. PROGRESSIVE

        2. PROPORTIONAL

        3. REGRESSIVE

    C.    MAIN SOURCES OF FEDERAL REVENUES

        1. INCOME TAXES (Who Pays?; Federal Tax Rates 1979-2001)

        2. SOCIAL SECURITY TAXES

        3. BORROWING ; A Blog View Criticizing the Debt)

            (a)   National Debt Clock

            (b)   Reasons for National Indebtedness

            (c) Dangers of Deficits and Debt

        D. TAX "EXPENDITURES"/EXEMPTIONS

V. CONTROLLABLE & UNCONTROLLABLE EXPENDITURES (Federal Budget; Goverment Dollars: Source and Destination; 

          Long Term Problem)

    A.    CONTROLLABLES

    B.    UNCONTROLLABLES

Key Web Sites

Keynesian Economics

Budget Deficits, Surpluses and Government Spending

FAQs about the Federal Budget