Exam 10: State and Local Government Expenditures

Suppose that a city mayor proposes to pay for the acquisition and construction of public parks by implementing a 7-year local sales tax.Someone argues that the financing mechanism should instead be something that is spread out over more time,noting that a person who moves here 8 years from now would get to enjoy the parks but under the current proposal wouldn't pay for them.Similarly,this individual argues that those who live in the community now pay for it,but if they move,they won't benefit at all from it after a few years.The mayor argues that those who move out of this area will in fact benefit from the parks beyond their personal use and that those who move to this area after the 7-year period will implicitly pay for the access to the parks.What does the mayor mean?

The key questions addressed in this chapter are: I.How does the provision of private goods at the local level impact their optimality? II)How should different types of spending be shared between different levels of government? III)What are the impacts of government grants designed to share spending across levels of government?

The Tiebout model implies that ________ should be financed at the local level,and ________ programs should be financed at the state and federal levels.

Matching grants have ___________; block grants have ___________.

Individuals who wish to live in a community with individuals richer than they are but without paying higher property taxes are hoping to receive the benefits of the:

A state is spending $40 million on highway improvements.If the federal government promises to pay the state $0.25 for every $1 spent by the state on highway improvements,and if highway improvements are a normal good,the income effect induces the state to spend _________ on highway improvements; the substitution effect induces the state to spend _________ on highway improvements.

On the spending side,which is NOT a large element of federal spending:

According to the Tiebout model,how would you respond if you didn't like the level of services provided in your community?

Which of the following is NOT true about the No Child Left Behind (NCLB)program?

A state is spending $30 million on disability programs in schools.If the federal government promises to give that state $25 million to spend on disability programs in its schools,the federal government is offering a _________ grant that _________ state spending on disability programs in schools.

Which of the following never has a substitution effect?

Suppose the federal government promises to pay a state $5 million to subsidize the loans of college students in that state.That transfer can best be characterized as:

If the Tiebout mechanism fails,which of the following should be done?

The share of spending by the federal government was _____ of all government spending in 1902 and ______ significantly over the next 50 years.

Suppose that the U.S.Congress is debating whether to end the Temporary Assistance to Needy Families (TANF)program and instead let local governments replace this program with their own programs.Which approach would be more efficient? Explain.

The federal government gives a state a _________ grant,promising to pay the state $0.25 for every $1 the state spends on health care for senior citizens,which _______ the price of health care to the state by _________.

Suppose the federal government wants a state to increase its spending on environmental cleanup from its current $4 million.The federal government _________ do this by offering a $3 million __________ grant.

To the extent that federal block grants do not replace state spending but increase overall spending,there is:

If the Tiebout model holds perfectly in reality,which of the following is TRUE?

Suppose the federal government promises to pay a state $0.50 for every $1 the state spends on health insurance for uninsured children.That transfer can best be characterized as: