Page 1

Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

INSTRUCTOR’S MANUAL: FISCAL ADMINISTRATION, ANALYSIS AND APPLICATIONS FOR THE PUBLIC SECTOR JOHN L. MIKESELL INDIANA UNIVERSITY NINTH EDITION

1


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

Chapter One Questions and Exercises 1. a. Yes. Total project benefits (4,900) exceed total project cost (4,000). b. No. No individual has benefits greater than cost of project. c. No. Based on net benefits, A and B would vote yes; C, D, and E would vote no. d. Revise cost shares so that Residents A and B pay more and reduce cost shares borne by C, D, and E. 2. Many of the benefits of primary and secondary education are public or social (external to the recipient of the education). The entity paying for the service is not able to capture the full benefit of the service. 3. No – the bread is rival and exhaustible. Examination Questions 1. Bain Educational operates an elementary school in Big Bucks, Kansas. 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. This represents an example of: a. b. c. d.

public provision and public production public provision and private production private provision and private production private provision and public production

2. 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. 3. Which of the following would be described as a common pool resource? a. b. c. d.

A can of soda An aquifer National defense A movie theatre

2


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

4. 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 federallysubsidized insurance is available. b. Inappropriate lyrics are available for downloading through the Internet when regulations are not enforced. c. Actions by one individual have an impact on innocent bystanders. d. None of the above. 5. Toll goods are characterized by: a. b. c. d.

joint use and exclusion not feasible. alternate (or competitive) use and exclusion not feasible. joint use and exclusion feasible. alternate (or competitive) use and exclusion feasible.

6. Non-appropriability consists of the following two aspects: a. b. c. d.

nonsubsidization and nondistribution. nonexclusion and nonexhaustion. taxing and spending. none of the above.

7. A public project produces the following pattern of individual benefits and costs for the people influenced by the project. Individual A B C D E Total

Benefit $8,000 $6,000 $10,000 $4,000 $2,000 $30,000

Cost Share $7,000 $5,000 $9,000 $6,000 $6,000 $33,000

The project: a. b. c. d.

passes the Pareto criterion but is not economically feasible. would pass a majority vote but not the Pareto criterion. passes the criterion of economic feasibility, but would not pass majority vote. passes the pareto criterion but would not pass a majority vote.

3


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

8. If a good is characterized by easy exclusion but many may concurrently use it without reducing the amount available for others, the good is a: a. b. c. d.

private good. common property resource. toll good. public good.

9. Which is not a reason for privatizing government services? a. b. c. d.

To increase production efficiency. To improve service to the public. To raise cash. All of the above are reasons to privatize.

10. Logrolling is the process where: a. one legislator trades his/her vote on one issue in exchange for the vote of another legislator on a second issue. b. campaign contributions are used to secure a legislator’s vote on a particular issue. c. media campaigns are initiated by special interest groups to sway public opinion and subsequently legislators votes on issues. d. unrelated amendments are attached to pending legislation to secure its passage.

4


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

Chapter Two Questions and Exercises . 2. a. Defense outlay change: (693,586 / 294,362) – 1 = 135.6 Nondefense outlay change: (658.2 / 319.7) – 1 = 105.9 Defense prices: (1.1327 / 0.8147) – 1 = 39.0 Nondefense prices: (1.1256 / 0.89) – 1 = 26.5 Defense real: [(693,586 / 1.1327)/(294,362 / 0.8147)] – 1 = 69.5 Nondefense real: [(658.2 / 1.1256) / (319.7 / 0.89)] – 1 = 62.8 b. Deflator: 2000 = 1.00; 2010 = 1.1256 / 0.89 = 1.2647 Nondefense outlay, real: 2000 = 319.7 Nondefense outlay, real: 2010 = 658.2 / 1.2647 = 520.4 Change (2005 = 1.00): 584.8 – 359.2 = 225.6 Change (2000 = 1.00): 520.4 – 319.7 = 200.7 Percent change (2000 = 1.00): (520.4 / 319.7) – 1 = 62.8 3. Strategies: a. Spend to save b. All or nothing c. Matching the competition d. Cut the popular program e. Spend to save f. It’s the local economy g. It’s so small h. Spend to save i. Washington Monument j. Crisis k. You pick l. Dire consequences m. Washington Monument n. Cut the popular programs o. Dire consequences


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

4. Hurricane damage, adjusted with GDP deflator: Damage, Current Dollars

Deflator, 2005 = 100

Constant (Real) Damage

Category

Katrina

81000

100

81,000.00

3

Andrew

26500

76.598

34,596.20

5

Wilma

20600

100

20,600.00

3

Charley

15000

96.786

15,498.11

4

Ivan

15000

96.786

15,498.11

4

Rita

11300

100

11,300.00

3

Hugo

7000

69.577

10,060.80

4

Frances

8900

96.786

9,195.54

2

Agnes

2100

26.657

7,877.86

1

Jeanne

6900

96.786

7,129.13

3

Betsy

1421

19.936

7,127.81

3

Camille

1421

23.119

6,146.46

5

Allison

5000

90.727

5,511.04

0

Frederic k

2300

43.798

5,251.38

3

Floyd

4500

86.842

5,181.82

2

Diane

832

16.601

5,011.75

1

Fran

3200

83.159

3,848.05

3

Opal

3000

81.606

3,676.20

3

Isabel

3370

94.135

3,579.96

2

Alicia

2000

57.652

3,469.09

3

Juan

1500

61.628

2,433.96

1

Dennis

2230

100

2,230.00

3

Elena

1250

61.628

2,028.30

3

Bob Gloria

1500 900

74.824 61.628

2,004.70

2 3


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

1,460.38 Georges

1155

85.584

1,349.55

2

Lili

860

92.196

932.80

1

Bonnie

720

85.584

841.28

0

Erin

700

85.584

817.91

0

Allison

500

69.577

718.63

0

Alberto

500

79.94

625.47

0

Frances

500

85.584

584.22

0

Ernesto

500

103.231

484.35

0


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

Examination Questions 1. 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 provision of government services by contract with private firms. 2. Place these stages in the budget cycle in the order in which they normally occur. a. Agency request, executive consideration, legislative consideration, audit, service delivery. b. Executive consideration, agency request, legislative consideration, service delivery, audit. c. Executive consideration, agency request, legislative consideration, audit, service delivery. d. Agency request, executive consideration, legislative consideration, service delivery, audit. 3. Choose the best way to complete the statement: “A budget is‌â€? a. b. c. d.

a forecast for spending. a plan for how to deal with problems. a forecast for revenue collection. an excuse for a big legislative party.

4. The purpose of a financial audit includes all of the following EXCEPT: a. b. c. d.

Assess legality of transactions Evaluate effectiveness of public resource use Test internal controls Examine completeness of financial records

5. 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. b. c. d.

$10 million $13 million ($11.5 million plus $1.5 million) $13.225 million ($11.5 million plus 15%) $11.5 million


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

6. Ubiquitous strategies for supporting budget proposals include: a. b. c. d.

arguing that the program in question pays for itself. linking the program to a crisis. proposing that politically popular programs be cut first. identifying and rallying a loyal clientele.

7. Use of modified accrual accounting: a. eliminates the need for keeping track of encumbrances during budget execution. b. records expenditures when contractual payments are made. c. records expenditures when materials are delivered. d. requires immediate depreciation of all capital assets. 8. Which of the following would not be a concern of a financial audit? a. Whether the Department of Environment Services actually spent the $150,000 its reports say it did. b. Whether the 700 gallons of gasoline purchased by the Department were actually delivered. c. Whether the 14 street cleaners employed by the Department could be replaced by a motorized sweeper to save $75,000 per year. d. Whether permit fees collected by the Department are remitted in their entirety to the city Treasurer.


Full file at http://testbank360.eu/solution-manual-fiscal-administration-9th-edition-john-mikesell

Solution manual fiscal administration 9th edition john mikesell  

solution manual fiscal administration 9th edition john mikesell. Full file at http://testbank360.eu/solution-manual-fiscal-administrati...

Read more
Read more
Similar to
Popular now
Just for you