American Economy Quiz Answers

American Economy: Fact or Fiction

1. Minimum wage (adjusted for inflation) is higher than 40 years ago.
Fiction: The current federal minimum wage is $7.25/hr, in 1970it was $1.60/hr (nearly $10/hr with inflation).

2. The amount allocated in the federal budget for unemployment is up this year.
Fiction: It’s down 35%.

3. US currency is backed by gold.
Fiction: Dollars are “fiat currency,” which means that their value stems from their ability to be exchanged for valued goods and services. FDR ended the gold standard in 1933.

4. The oft-heard and much maligned earmarks are a major contributor to the federal deficit.
Fiction: Eliminating all of the earmarks would cut the deficit by less than 1%.

5. George Washington insisted his portrait be on the 1-dollar bill.
Fiction: He resisted, thinking it would be a typical move made by the hated European monarchs. His portrait first showed up on the $1 bill in 1869.

6. On average, Americans spend more on healthcare than on housing.
Fiction: Per US household, average annual healthcare costs are approximately $2,853 and average annual housing costs are approximately $16,920.

7. If you’re self employed you only have to file taxes once per year (April 15) just like normal folks.
Fiction: Quarterly estimates are required.

8. As a US citizen you are not required to include offshore income on your personal income tax returns.
Fiction: The United States is one of the few countries that requires international income made by US citizens to be taxed.

9. In some cases, you are not required to file a federal tax return.
Fact: There are actually a few very specific occasions in which filing an IRS income tax return is not required.

10. 44 US states have filed for bankruptcy.
Fiction: No state has ever filed for bankruptcy, but 44 US states have deep budgetary shortfalls, bordering on bankruptcy. Texas, Alaska, Montana, North Dakota, West Virginia and Wyoming are not among them.

Bonus Question:

US defense spending is:
A) $663.8 billion
B) $708.3 billion
C) $750 billion
D) All of the above, depending on the source

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