Test Bank for Fiscal Administration, 11th Edition by John Mikesell
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Module
Fiscal Administration 11e Mikesell
Institution
Fiscal Administration 11e Mikesell
Test Bank for Fiscal Administration,11e 11th Edition by John Mikesell. Complete chapters (Chap 1 to 15) are included with answers. Complete Guide and Latest Edition
1. Fundamental Principles of Public Finance.
2. The Logic of the Budget Process.
3. Budget Methods and Practices.
4. Federal Bud...
Indicate the answer choice that best completes the statement or answers the question.
1. Which of the following would be described as a common pool resource?
a. A toll road
b. Fisheries
c. National defense
d. A public park
ANSWER: b
2. A public project produces the following pattern of individual benefits and costs for the people influenced by the
project.
Individual Benefit Cost Share
A $8,000 $7,000
B $6,000 $5,000
C $10,000 $9,000
D $4,000 $6,000
E $2,000 $6,000
Total $30,000 $33,000
Which of the following best describes the project?
a. It passes the Pareto criterion but is not economically feasible.
b. The project would pass a majority vote but fails the Pareto criterion.
c. It passes the criterion of economic feasibility, but would not pass majority vote.
d. The project passes the Pareto criterion but would not pass a majority vote.
ANSWER: b
3. What characterizes toll goods?
a. Nonrival and exclusion not feasible.
b. Alternate (or competitive) use and exclusion not feasible.
c. Nonrival and exclusion feasible.
d. Alternate (or competitive) use and exclusion feasible.
ANSWER: c
4. Which of the following arguments is based on the concept of adverse selection?
a. The U.S. military needs higher pay to attract the best personnel.
b. Private medical insurance companies seek to exclude those most likely to need healthcare.
c. Only the national government can successfully conduct macroeconomic stabilization policies.
d. Mosquito abatement is a public good.
ANSWER: b
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Chapter 01 11e Mikesell
5. A charter school organization opens an elementary school in Anytown, Anystate. It is open to any student in the
local school district and the school is financed by a property tax levied by the local school district. What is this an
example of?
a. Public provision and public production
b. Public provision and private production
c. Private provision and private production
d. Private provision and public production
ANSWER: b
6. What is logrolling?
a. When one legislator trades their vote on one issue in exchange for the vote of another legislator on a
second issue.
b. Campaign contribution patterns used to secure a legislator’s vote on a particular issue.
c. Media campaigns initiated by special interest groups to sway public opinion and subsequently legislators
vote on issues.
d. Unrelated amendments attached to pending legislation to secure its passage
ANSWER: a
7. What is the term for a good characterized by easy exclusion but many may concurrently use it without reducing
the amount available for others?
a. Private good
b. Common property resource
c. Toll good
d. Public good
ANSWER: c
8. What are the two aspects of nonappropriability?
a. Nonsubsidization and nondistribution.
b. Nonexclusion and nonexhaustion.
c. Taxing and spending.
d. Partisan and nonpartisan
ANSWER: b
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Chapter 01 11e Mikesell
9. Which of the following is an application of the principle of moral hazard?
a. People build homes in areas subject to severe flood damage when federally subsidized insurance is
available.
b. Inappropriate lyrics are viewable on the Web when regulations are not enforced.
c. Actions by one individual have an impact on innocent bystanders.
d. Grazing rights are auctioned off quarterly.
ANSWER: a
10. When are private sector efficiencies most likely to occur?
a. When a municipality has limited access to bond revenue and significant land assets.
b. In cases where there is highly variable tax revenue and a closely divided legislature.
c. When there is a well-known monopoly and multiple complex tasks.
d. In cases where the task is well-defined, measurable, and subject to competition.
ANSWER: d
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Chapter 02 11e Mikesell
Indicate the answer choice that best completes the statement or answers the question.
1. Which of the following is a ubiquitous strategy for gaining support for budget proposals?
a. Arguing that the program in question pays for itself.
b. Linking the program to a crisis.
c. Proposing that politically popular programs be cut first.
d. Identifying and rallying a loyal clientele.
ANSWER: d
2. Agency X had an appropriation of $10 million in 2013 and of $11.5 million in 2014 (an increase of $1.5 million or
15%). According to the incrementalist view, what is the 2014 budget base for the agency?
a. $10 million
b. $13 million ($11.5 million plus $1.5 million)
c. $13.225 million ($11.5 million plus 15%)
d. $11.5 million
ANSWER: d
3. Which of the following is practiced under modified accrual accounting?
a. Opting out of tracking encumbrances during budget execution.
b. Recording expenditures when contractual payments are made.
c. Recording expenditures when materials are delivered.
d. Requiring immediate depreciation of all capital assets.
ANSWER: c
4. Which of the following is an accurate statement about the relative size of government purchases and government
spending?
a. Because spending is the same as purchasing, the measures must be the same.
b. Purchases will be greater than spending because of deficit and surplus adjustments.
c. Spending includes transfer payments like social security, but purchases do not.
d. Neither includes the provision of government services by contract with private firms.
ANSWER: c
5. What is the central purpose of a budget?
a. Forecasting spending.
b. Fitting programs into available resources.
c. Forecasting revenue collection.
d. Engaging in legislative debate.
ANSWER: b
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