Question 1

If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:

Accepted Answer

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

Question 2

Total U.S. government expenditures as a percentage of GDP were largest during which of the following periods of time?

Accepted Answer

A) The Great Depression. 
B) World War II. 
C) The Vietnam War. 
D) The Energy Crisis of the mid- and late-1970s. 
A) The Great Depression. 
B) World War II. 
C) The Vietnam War. 
D) The Energy Crisis of the mid- and late-1970s.

Question 3

The ability-to-pay philosophy of taxation argues for a progressive form of taxation.

Accepted Answer

A) True 
 B)False

Question 4

The federal income tax is progressive because the tax rates increase at higher income levels.

Accepted Answer

A) True 
 B)False

Question 5

A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:

Accepted Answer

A) proportional tax. 
B) regressive tax. 
C) progressive tax. 
D) mix of a and b. 
A) proportional tax. 
B) regressive tax. 
C) progressive tax. 
D) mix of a and b.

Question 6

Exhibit 12-1 Income for two persons   In Exhibit 12-1, if the income tax system is progressive, then:

Accepted Answer

A) Elaine and Daniel will face the same tax rate and will have tax bills the same size. 
B) Elaine and Daniel will face the same tax rate but have tax bills that are different sizes. 
C) Elaine will face a higher tax rate and will have a larger tax bill than Daniel. 
D) Elaine will face a lower tax rate and will have a smaller tax bill than Daniel. 
E) Elaine will face a lower tax rate but will have a larger tax bill than Daniel. 
A) Elaine and Daniel will face the same tax rate and will have tax bills the same size. 
B) Elaine and Daniel will face the same tax rate but have tax bills that are different sizes. 
C) Elaine will face a higher tax rate and will have a larger tax bill than Daniel. 
D) Elaine will face a lower tax rate and will have a smaller tax bill than Daniel. 
E) Elaine will face a lower tax rate but will have a larger tax bill than Daniel.

Question 7

A progressive tax means the percentage of income paid as taxes:

Accepted Answer

A) increases as income increases. 
B) decreases as income increases. 
C) remains the same as income increases. 
D) none of these. 
A) increases as income increases. 
B) decreases as income increases. 
C) remains the same as income increases. 
D) none of these.

Question 8

A tax is proportional if, as a person's income rises, the:

Accepted Answer

A) tax rate is constant. 
B) tax rate falls. 
C) tax rate rises. 
D) amount of the tax is constant. 
E) amount of the tax falls. 
A) tax rate is constant. 
B) tax rate falls. 
C) tax rate rises. 
D) amount of the tax is constant. 
E) amount of the tax falls.

Question 9

What are the public choice theory arguments against government involvement in the economy?

Accepted Answer

Public choice theory emphasizes the poss

Question 10

Which of the following offers theories to explain why the government, like the private sector, may also "fail"?

Accepted Answer

A) Social economics. 
B) Public choice theory. 
C) Rational expectations theory. 
D) Keynesian economics. 
A) Social economics. 
B) Public choice theory. 
C) Rational expectations theory. 
D) Keynesian economics.

Question 11

There is no difference between government expenditures or outlays and government purchases or spending.

Accepted Answer

A) True 
 B)False

Question 12

Suppose George's income is $10,000 and he pays a tax of $1,000, but Laura's income is $50,000 and she pays a tax of $4,000. Such a tax is:

Accepted Answer

A) regressive. 
B) progressive. 
C) proportional. 
D) flat. 
A) regressive. 
B) progressive. 
C) proportional. 
D) flat.

Question 13

Suppose a person with an income of $20,000 pays a tax of $2,000. If the tax is progressive, then how large of a tax will a person with an income of $40,000 pay?

Accepted Answer

A) Exactly $2,000. 
B) Between $2,000 and $4,000. 
C) Exactly $4,000. 
D) More than $4,000. 
A) Exactly $2,000. 
B) Between $2,000 and $4,000. 
C) Exactly $4,000. 
D) More than $4,000.

Question 14

When a tax is regressive, as a person's income rises, the tax rate:

Accepted Answer

A) stays the same. 
B) decreases. 
C) increases. 
D) increase and then decreases. 
E) decreases and then increases. 
A) stays the same. 
B) decreases. 
C) increases. 
D) increase and then decreases. 
E) decreases and then increases.

Question 15

Suppose fairness is defined as those who receive the greatest benefits from government should pay the most in taxes, then which of the following taxation systems would be consistent with this notion of fairness?

Accepted Answer

A) User fees for national parks. 
B) Gasoline taxes to fund highway maintenance. 
C) A tax on the poor to finance food stamps and other low-income assistance programs. 
D) All of the above are consistent. 
A) User fees for national parks. 
B) Gasoline taxes to fund highway maintenance. 
C) A tax on the poor to finance food stamps and other low-income assistance programs. 
D) All of the above are consistent.

Question 16

Which of the following taxes contributed the greatest percentage of total federal government tax revenues in recent years?

Accepted Answer

A) Individual income taxes. 
B) Corporate income taxes. 
C) Social Security taxes. 
D) Excise taxes. 
A) Individual income taxes. 
B) Corporate income taxes. 
C) Social Security taxes. 
D) Excise taxes.

Question 17

State and local property taxes are regressive.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following can be classified as a regressive tax?

Accepted Answer

A) Federal corporate income tax. 
B) Federal personal income tax. 
C) Federal gasoline tax. 
D) All of these. 
A) Federal corporate income tax. 
B) Federal personal income tax. 
C) Federal gasoline tax. 
D) All of these.

Question 19

According to the shortsightedness effect, politicians tend to favor projects with:

Accepted Answer

A) short-run benefits and short-run costs. 
B) short-run benefits and long-run costs. 
C) long-run benefits and short-run costs. 
D) long-run benefits and long-run costs. 
A) short-run benefits and short-run costs. 
B) short-run benefits and long-run costs. 
C) long-run benefits and short-run costs. 
D) long-run benefits and long-run costs.

Question 20

Jose pays a tax of $24,000 on his income of $60,000, while Richard pays a tax of $3,000 on his income of $30,000. This tax is:

Accepted Answer

A) a flat tax. 
B) progressive. 
C) proportional. 
D) regressive. 
A) a flat tax. 
B) progressive. 
C) proportional. 
D) regressive.

Exam 12: The Public Sector

If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:

Total U.S. government expenditures as a percentage of GDP were largest during which of the following periods of time?

The ability-to-pay philosophy of taxation argues for a progressive form of taxation.

The federal income tax is progressive because the tax rates increase at higher income levels.

A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:

Exhibit 12-1 Income for two persons In Exhibit 12-1, if the income tax system is progressive, then:

A progressive tax means the percentage of income paid as taxes:

A tax is proportional if, as a person's income rises, the:

What are the public choice theory arguments against government involvement in the economy?

Which of the following offers theories to explain why the government, like the private sector, may also "fail"?

There is no difference between government expenditures or outlays and government purchases or spending.

Suppose George's income is $10,000 and he pays a tax of $1,000, but Laura's income is $50,000 and she pays a tax of $4,000. Such a tax is:

Suppose a person with an income of $20,000 pays a tax of $2,000. If the tax is progressive, then how large of a tax will a person with an income of $40,000 pay?

When a tax is regressive, as a person's income rises, the tax rate:

Suppose fairness is defined as those who receive the greatest benefits from government should pay the most in taxes, then which of the following taxation systems would be consistent with this notion of fairness?

Which of the following taxes contributed the greatest percentage of total federal government tax revenues in recent years?

State and local property taxes are regressive.

Which of the following can be classified as a regressive tax?

According to the shortsightedness effect, politicians tend to favor projects with:

Jose pays a tax of $24,000 on his income of $60,000, while Richard pays a tax of $3,000 on his income of $30,000. This tax is:

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