Final answer:
Expense amounts by natural classification can indeed be determined from the statement of functional expenses, understanding the allocation between program services and supporting services. Statements about federal spending growth, the size of U.S. government control over the economy, and the proportion of federal revenue from personal income taxes were examined and corrected as mostly false based on share of GDP and other factors.
Step-by-step explanation:
True or False Statements About Government Spending and Revenue
The statement regarding the ability to determine expense amounts by natural classification from the statement of functional expenses is true. This financial statement provides details on how an organization expends resources on both program services and supporting services, which allows for effective tracking and management of funds.
Now, addressing the true or false statements:
- a. Federal spending has indeed grown substantially in nominal dollars over recent decades, but as a share of GDP, this is false.
- b. By world standards, the U.S. government controls a relatively small share of the U.S. economy, making this statement false.
- c. While personal income taxes represent a significant source of federal revenue, it is not accurate to state that they constitute a majority. Therefore, this statement is false.
- d. Education spending is significantly higher at the state and local level than at the federal level, so this statement is false.
- e. Contrary to the statement, state and local government spending has risen, about 50% as a share of GDP, making this statement false.
- f. Defense spending is not higher now than ever, either as a share of GDP or in real dollars, so this statement is false.
- g. The share of the economy going to federal taxes has not increased substantially over time, rendering this statement false.
- h. Foreign aid constitutes about 1% of federal spending, which is not a large portion, so this statement is false as well.
These answers provide an overview of the general trends and specifics regarding government spending and revenue sources.