Name

Chapter 10

SECTION

Class

Date

GUIDED READING

Answer the following questions as you read Section 4, Federal Deficits and the National Debt,
in Chapter 10 of your textbook.
1. How do federal deficits lead to the federal debt?
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
2. In what two ways is public debt different from private debt?
a. ________________________________________________________________________________
b. ________________________________________________________________________________
3. What are four important effects of the federal debt on the economy?
a. ________________________________________________________________________________
__________________________________________________________________________________
b. ________________________________________________________________________________
__________________________________________________________________________________
c. ________________________________________________________________________________
__________________________________________________________________________________
d. ________________________________________________________________________________
__________________________________________________________________________________

Copyright by The McGraw-Hill Companies, Inc.

4. What is a balanced budget?

__________________________________________________________________________________
__________________________________________________________________________________
5. Recently, what three laws were passed to control the federal deficit?
a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
6. a. What are entitlements?
__________________________________________________________________________________
__________________________________________________________________________________
b. Why do entitlements pose a problem for deficit reduction?
__________________________________________________________________________________
__________________________________________________________________________________

GUIDED READING ACTIVITIES

ECONOMICS: PRINCIPLES AND PRACTICES

33

Name

Chapter 10

SECTION

Class

Date

GUIDED READING

Answer the following questions as you read Section 3, State and Local Government Expenditures,
in Chapter 10 of your textbook.
1. Most states model the approval process for spending money on:
__________________________________________________________________________________
__________________________________________________________________________________
2. What are the six largest categories of state government expenditures?
a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
d. ________________________________________________________________________________
e. ________________________________________________________________________________
f. ________________________________________________________________________________

4. What are the ten major categories of local government expenditures?

a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
d. ________________________________________________________________________________
e. ________________________________________________________________________________
f. ________________________________________________________________________________
g. ________________________________________________________________________________
h. ________________________________________________________________________________
i. ________________________________________________________________________________
j. ________________________________________________________________________________

32

ECONOMICS: PRINCIPLES AND PRACTICES

GUIDED READING ACTIVITIES

Copyright by The McGraw-Hill Companies, Inc.

3. What are four other categories of state spending?

a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
d. ________________________________________________________________________________

Name

Chapter 10

SECTION

Class

Date

GUIDED READING

Answer the following questions as you read Section 2, Federal Government Expenditures,
in Chapter 10 of your textbook.
1. What is the federal budget?
__________________________________________________________________________________
__________________________________________________________________________________
2. What are the two main phases in the development and approval of the federal budget?
a. ________________________________________________________________________________
__________________________________________________________________________________
b. ________________________________________________________________________________
__________________________________________________________________________________

Copyright by The McGraw-Hill Companies, Inc.

3. What role does the Office of Management and Budget (OMB) play in preparing the federal
budget?
__________________________________________________________________________________
__________________________________________________________________________________
4. What are the top eleven categories on which the federal government spends the most money?
a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
d. ________________________________________________________________________________
e. ________________________________________________________________________________
f. ________________________________________________________________________________
g. ________________________________________________________________________________
h. ________________________________________________________________________________
i. ________________________________________________________________________________
j. ________________________________________________________________________________
k. ________________________________________________________________________________
5. In which category has the federal government historically spent the most money?
__________________________________________________________________________________

GUIDED READING ACTIVITIES

ECONOMICS: PRINCIPLES AND PRACTICES

31

Name

Chapter 10

SECTION

Class

Date

GUIDED READING

Answer the following questions as you read Section 1, The Economics of Government Spending,
in Chapter 10 of your textbook.
1. Why does the growth of government spending concern everyone?
__________________________________________________________________________________
__________________________________________________________________________________
2. What are two reasons that public sector spending began to rise significantly in the 1940s?
a. ________________________________________________________________________________
__________________________________________________________________________________
b. ________________________________________________________________________________
__________________________________________________________________________________
3. What are the two basic kinds of government spending?
a. ________________________________________________________________________________
b. ________________________________________________________________________________

5. In what three main ways does government spending affect the economy?
a. ________________________________________________________________________________
__________________________________________________________________________________
b. ________________________________________________________________________________
__________________________________________________________________________________
c. ________________________________________________________________________________
__________________________________________________________________________________

30

ECONOMICS: PRINCIPLES AND PRACTICES

GUIDED READING ACTIVITIES

Copyright by The McGraw-Hill Companies, Inc.

4. What are six examples of transfer payments?

a. ________________________________________________________________________________
b. ________________________________________________________________________________
c. ________________________________________________________________________________
d. ________________________________________________________________________________
e. ________________________________________________________________________________
f. ________________________________________________________________________________