Question 1

The money for Social Security payments to current retirees comes from

Accepted Answer

A) payroll taxes collected from those retirees when they were working. 
B) income taxes collected from the current working population. 
C) payroll taxes collected from the current working population. 
D) only the interest earned now by the government on the invested Social Security trust fund. 
A) payroll taxes collected from those retirees when they were working. 
B) income taxes collected from the current working population. 
C) payroll taxes collected from the current working population. 
D) only the interest earned now by the government on the invested Social Security trust fund.

Question 2

What is the controversy surrounding property taxes as a source for school funding?

Accepted Answer

The controversy behind school funding ap

Question 3

The head tax is regressive.

Accepted Answer

A) True 
 B)False

Question 4

The people most likely to pay little personal income tax to the U.S.government are

Accepted Answer

A) the middle class. 
B) renters. 
C) the very poor. 
D) earners of wages (as opposed to salaries). 
A) the middle class. 
B) renters. 
C) the very poor. 
D) earners of wages (as opposed to salaries).

Question 5

The second largest source of revenue for the federal government is the

Accepted Answer

A) import tax. 
B) payroll tax. 
C) export tax. 
D) federal property tax. 
A) import tax. 
B) payroll tax. 
C) export tax. 
D) federal property tax.

Question 6

What are the arguments for and against federal government grants to states?

Accepted Answer

Supporters of large grants see state gov

Question 7

For about the last 45 years, federal taxes have remained relatively constant as a percentage of GDP.

Accepted Answer

A) True 
 B)False

Question 8

The corporate income tax is

Accepted Answer

A) a tax on corporate profit, not revenue. 
B) the single largest source of federal revenue. 
C) a payroll tax paid partially by employees and partially by employers. 
D) has increased as a proportion of federal tax revenue since 1950. 
A) a tax on corporate profit, not revenue. 
B) the single largest source of federal revenue. 
C) a payroll tax paid partially by employees and partially by employers. 
D) has increased as a proportion of federal tax revenue since 1950.

Question 9

When a tax is imposed on an item, it can generally be said that the incidence of the tax is

Accepted Answer

A) entirely on the buyer. 
B) entirely on the seller. 
C) on both the buyer and seller. 
D) not determined in this manner. 
A) entirely on the buyer. 
B) entirely on the seller. 
C) on both the buyer and seller. 
D) not determined in this manner.

Question 10

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax, which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Accepted Answer

A) the benefits principle. 
B) the excess burden principle. 
C) the ability-to-pay principle. 
D) the constitutional principle. 
A) the benefits principle. 
B) the excess burden principle. 
C) the ability-to-pay principle. 
D) the constitutional principle.

Question 11

Horizontal equity is the concept that

Accepted Answer

A) equally situated individuals should be taxed equally. 
B) persons with the same income should be taxed equally. 
C) equal property value should be taxed equally. 
D) persons living in the same neighborhood should be taxed equally. 
A) equally situated individuals should be taxed equally. 
B) persons with the same income should be taxed equally. 
C) equal property value should be taxed equally. 
D) persons living in the same neighborhood should be taxed equally.

Question 12

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Accepted Answer

A) capital gains. 
B) interest on corporate bonds. 
C) interest on municipal bonds. 
D) offset by mortgage interest. 
A) capital gains. 
B) interest on corporate bonds. 
C) interest on municipal bonds. 
D) offset by mortgage interest.

Question 13

The ability-to-pay principle is most closely tied to the concept of

Accepted Answer

A) horizontal equity in taxation. 
B) fiscal federalism. 
C) vertical equity in taxation. 
D) the benefits principle of tax equity. 
A) horizontal equity in taxation. 
B) fiscal federalism. 
C) vertical equity in taxation. 
D) the benefits principle of tax equity.

Question 14

Cities and towns mainly rely for revenue on

Accepted Answer

A) property taxes. 
B) income taxes. 
C) excise taxes. 
D) payroll taxes. 
A) property taxes. 
B) income taxes. 
C) excise taxes. 
D) payroll taxes.

Question 15

On necessities, more of the incidence of tax is

Accepted Answer

A) borne by the producer. 
B) borne by the consumer. 
C) shared equally between the producer and the consumer. 
D) None of the above is correct. 
A) borne by the producer. 
B) borne by the consumer. 
C) shared equally between the producer and the consumer. 
D) None of the above is correct.

Question 16

Tax loopholes

Accepted Answer

A) reduce the progressivity of the federal income tax. 
B) encourage particular patterns of behavior. 
C) include exemption of interest earned on municipal bonds. 
D) All of the above are correct. 
A) reduce the progressivity of the federal income tax. 
B) encourage particular patterns of behavior. 
C) include exemption of interest earned on municipal bonds. 
D) All of the above are correct.

Question 17

Loopholes reduce the efficiency of the tax system.

Accepted Answer

A) True 
 B)False

Question 18

State and local governments typically spend most of their budgets on providing

Accepted Answer

A) education. 
B) public goods. 
C) public welfare programs. 
D) police protection and administrative services. 
A) education. 
B) public goods. 
C) public welfare programs. 
D) police protection and administrative services.

Question 19

An excess burden is present when taxpayers alter their behavior on account of taxation.

Accepted Answer

A) True 
 B)False

Question 20

The corporate income tax is

Accepted Answer

A) an indirect tax. 
B) a regressive tax. 
C) the second largest source of revenue for the federal government. 
D) a direct tax. 
A) an indirect tax. 
B) a regressive tax. 
C) the second largest source of revenue for the federal government. 
D) a direct tax.

Exam 17: Taxation and Resource Allocation

The money for Social Security payments to current retirees comes from

What is the controversy surrounding property taxes as a source for school funding?

The head tax is regressive.

The people most likely to pay little personal income tax to the U.S.government are

The second largest source of revenue for the federal government is the

What are the arguments for and against federal government grants to states?

For about the last 45 years, federal taxes have remained relatively constant as a percentage of GDP.

The corporate income tax is

When a tax is imposed on an item, it can generally be said that the incidence of the tax is

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax, which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Horizontal equity is the concept that

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

The ability-to-pay principle is most closely tied to the concept of

Cities and towns mainly rely for revenue on

On necessities, more of the incidence of tax is

Tax loopholes

Loopholes reduce the efficiency of the tax system.

State and local governments typically spend most of their budgets on providing

An excess burden is present when taxpayers alter their behavior on account of taxation.

The corporate income tax is

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Supply and Demand an Initial Look

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Externalities the Environment and Natural Resources

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

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