Question 1

Cost-benefit analysis cannot be applied to collective or public choice decision-making.

Accepted Answer

A) True 
 B)False

Question 2

The largest revenue source in the U.S. federal tax system is the corporate income tax.

Accepted Answer

A) True 
 B)False

Question 3

If a person is concerned that an additional $1,000 income will move him\her into a new tax bracket, that person is worried about the:

Accepted Answer

A) proportional rate. 
B) regressive tax rate. 
C) marginal tax rate. 
D) flat tax rate. 
A) proportional rate. 
B) regressive tax rate. 
C) marginal tax rate. 
D) flat tax rate.

Question 4

In which of the following countries are taxes (measured as a percentage of GDP)the lowest?

Accepted Answer

A) Canada. 
B) France. 
C) Sweden. 
D) The United States. 
A) Canada. 
B) France. 
C) Sweden. 
D) The United States.

Question 5

The primary source of revenue at the federal level is:

Accepted Answer

A) the corporate income tax. 
B) the personal income tax. 
C) property taxes. 
D) sales taxes. 
E) customs duties. 
A) the corporate income tax. 
B) the personal income tax. 
C) property taxes. 
D) sales taxes. 
E) customs duties.

Question 6

The social security tax is a:

Accepted Answer

A) progressive tax at all income levels. 
B) regressive tax above a certain income level. 
C) proportional tax at all income levels. 
D) none of these. 
A) progressive tax at all income levels. 
B) regressive tax above a certain income level. 
C) proportional tax at all income levels. 
D) none of these.

Question 7

A proportional tax charges the same percentage of income, regardless of the size of income.

Accepted Answer

A) True 
 B)False

Question 8

Who is recognized as the founder of public choice theory?

Accepted Answer

A) James Buchanan. 
B) Steve Forbes. 
C) Joseph Pechman. 
D) Adam Smith. 
A) James Buchanan. 
B) Steve Forbes. 
C) Joseph Pechman. 
D) Adam Smith.

Question 9

Since 1970, the composition of federal expenditures has:

Accepted Answer

A) been virtually unchanged, but federal spending as a share of GDP has declined substantially. 
B) been virtually unchanged, but federal spending as a share of GDP has increased sharply. 
C) shifted away from national defense and toward spending on income security. 
D) shifted away from income security income transfers and toward spending on national defense. 
A) been virtually unchanged, but federal spending as a share of GDP has declined substantially. 
B) been virtually unchanged, but federal spending as a share of GDP has increased sharply. 
C) shifted away from national defense and toward spending on income security. 
D) shifted away from income security income transfers and toward spending on national defense.

Question 10

Since the 1950s, total private sector expenditures in the United States fell by half to 50 percent of GDP.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 12-4 Marginal tax rate lines   In Exhibit 12-4, line C represents a(n):

Accepted Answer

A) regressive tax. 
B) progressive tax. 
C) proportional tax. 
D) ability-to-pay tax. 
A) regressive tax. 
B) progressive tax. 
C) proportional tax. 
D) ability-to-pay tax.

Question 12

Consider two people, Sandy Ross, who earns $25,000, and Gary Belcher, who earns $50,000. If the flat-tax rate is 20 percent, then:

Accepted Answer

A) the government collects a total of $20,000. 
B) Gary pays twice the tax amount Sandy pays. 
C) Gary pays three times the tax amount Sandy pays. 
D) Gary and Sandy pay exactly the same tax amount. 
E) Gary pays $15,000 in taxes. 
A) the government collects a total of $20,000. 
B) Gary pays twice the tax amount Sandy pays. 
C) Gary pays three times the tax amount Sandy pays. 
D) Gary and Sandy pay exactly the same tax amount. 
E) Gary pays $15,000 in taxes.

Question 13

Exhibit 12-2 Income and taxes for two persons   In Exhibit 12-2, we can tell that the tax shown here is:

Accepted Answer

A) a poll tax. 
B) proportional. 
C) progressive. 
D) equitable. 
E) regressive. 
A) a poll tax. 
B) proportional. 
C) progressive. 
D) equitable. 
E) regressive.

Question 14

Sales and excise taxes are:

Accepted Answer

A) progressive. 
B) proportional. 
C) regressive. 
D) fixed-revenue. 
A) progressive. 
B) proportional. 
C) regressive. 
D) fixed-revenue.

Question 15

Exhibit 12-4 Marginal tax rate lines   In Exhibit 12-4, if A represents state and local taxes and B represents federal income taxes, what is the result of imposing both types of taxes?

Accepted Answer

A) regressive tax. 
B) progressive tax. 
C) proportional tax. 
D) ability-to-pay tax. 
A) regressive tax. 
B) progressive tax. 
C) proportional tax. 
D) ability-to-pay tax.

Question 16

A rational person may remain less than fully informed on an issue to be decided in an election.

Accepted Answer

A) True 
 B)False

Question 17

Since 1929, total government taxes as a percentage of GDP:

Accepted Answer

A) climbed from 10 percent to about 30 percent. 
B) remained close to 30 percent. 
C) climbed from 30 percent to about 50 percent. 
D) climbed from 15 percent to about 50 percent. 
A) climbed from 10 percent to about 30 percent. 
B) remained close to 30 percent. 
C) climbed from 30 percent to about 50 percent. 
D) climbed from 15 percent to about 50 percent.

Question 18

Which of the following countries had the highest level of government expenditures as a share of GDP?

Accepted Answer

A) Sweden. 
B) Japan. 
C) United States. 
D) Italy. 
A) Sweden. 
B) Japan. 
C) United States. 
D) Italy.

Question 19

The major source of tax revenues collected by the Federal government is the corporate income tax.

Accepted Answer

A) True 
 B)False

Question 20

The choice of a voter to remain uninformed because the marginal cost of obtaining information is greater than the marginal benefit from obtaining knowledge is called:

Accepted Answer

A) irrational ignorance. 
B) rational ignorance. 
C) collective interest. 
D) choice. 
A) irrational ignorance. 
B) rational ignorance. 
C) collective interest. 
D) choice.

Exam 12: The Public Sector

Cost-benefit analysis cannot be applied to collective or public choice decision-making.

The largest revenue source in the U.S. federal tax system is the corporate income tax.

If a person is concerned that an additional $1,000 income will move him\her into a new tax bracket, that person is worried about the:

In which of the following countries are taxes (measured as a percentage of GDP)the lowest?

The primary source of revenue at the federal level is:

The social security tax is a:

A proportional tax charges the same percentage of income, regardless of the size of income.

Who is recognized as the founder of public choice theory?

Since 1970, the composition of federal expenditures has:

Since the 1950s, total private sector expenditures in the United States fell by half to 50 percent of GDP.

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, line C represents a(n):

Consider two people, Sandy Ross, who earns $25,000, and Gary Belcher, who earns $50,000. If the flat-tax rate is 20 percent, then:

Exhibit 12-2 Income and taxes for two persons In Exhibit 12-2, we can tell that the tax shown here is:

Sales and excise taxes are:

Exhibit 12-4 Marginal tax rate lines In Exhibit 12-4, if A represents state and local taxes and B represents federal income taxes, what is the result of imposing both types of taxes?

A rational person may remain less than fully informed on an issue to be decided in an election.

Since 1929, total government taxes as a percentage of GDP:

Which of the following countries had the highest level of government expenditures as a share of GDP?

The major source of tax revenues collected by the Federal government is the corporate income tax.

The choice of a voter to remain uninformed because the marginal cost of obtaining information is greater than the marginal benefit from obtaining knowledge is called:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Business Cycles and Unemployment

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters