Question 1

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. B

Question 2

A person who is in the 15 percent marginal tax bracket and has a total taxable income of $100,000 will owe $15,000 in taxes.

Accepted Answer

A) True 
 B)False  False

Question 3

People who often impose cost on the majority in order to benefit certain groups are called:

Accepted Answer

A)  laissez-faire groups. 
B)  encounter groups. 
C)  fair-interest groups. 
D)  special-interest groups. 
E)  none of the above. 
A)  laissez-faire groups. 
B)  encounter groups. 
C)  fair-interest groups. 
D)  special-interest groups. 
E)  none of the above. D

Question 4

The federal income tax is progressive because poor people pay little or no taxes.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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 7

Total government spending (federal, state, and local) sums to approximately:

Accepted Answer

A)  10 percent of the U.S. economy. 
B)  20 percent of the U.S. economy. 
C)  one-third of the U.S. economy. 
D)  one-half of the U.S. economy. 
A)  10 percent of the U.S. economy. 
B)  20 percent of the U.S. economy. 
C)  one-third of the U.S. economy. 
D)  one-half of the U.S. economy.

Question 8

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.

Question 9

Under majority rule, the government passes _________.

Accepted Answer

A)  ​only those public projects that pass a benefit/cost test. 
B)  ​only those public projects that fail a benefit/cost test. 
C)  ​some public projects that fail a benefit/cost test. 
D)  ​no public/private projects. 
A)  ​only those public projects that pass a benefit/cost test. 
B)  ​only those public projects that fail a benefit/cost test. 
C)  ​some public projects that fail a benefit/cost test. 
D)  ​no public/private projects.

Question 10

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 11

Describe the major sources of tax revenue and expenditures for the federal government.

Accepted Answer

The major source of tax revenu

Question 12

A problem with the income security program category for federal government outlays is that it excludes unemployment compensation.

Accepted Answer

A) True 
 B)False

Question 13

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 14

A tax for which the rate varies directly with the income of the person taxed is known as a(n):

Accepted Answer

A)  regressive tax. 
B)  progressive tax. 
C)  proportional tax. 
D)  flat tax. 
E)  excise tax. 
A)  regressive tax. 
B)  progressive tax. 
C)  proportional tax. 
D)  flat tax. 
E)  excise tax.

Question 15

Exhibit 16-3  Income for two persons   In Exhibit 16-3, if the income tax system is currently proportional, we know that:

Accepted Answer

A)  Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a regressive income tax system. 
B)  Meredith and Hillary would both probably prefer a regressive income tax system. 
C)  Meredith and Hillary would both probably prefer a progressive income tax system. 
D)  Meredith would probably prefer a regressive income tax system while Hillary would probably prefer a progressive income tax system. 
E)  Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a head tax. 
A)  Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a regressive income tax system. 
B)  Meredith and Hillary would both probably prefer a regressive income tax system. 
C)  Meredith and Hillary would both probably prefer a progressive income tax system. 
D)  Meredith would probably prefer a regressive income tax system while Hillary would probably prefer a progressive income tax system. 
E)  Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a head tax.

Question 16

When the tax structure of a nation is progressive, as incomes increase, the tax rate:

Accepted Answer

A)  declines. 
B)  remains the same. 
C)  increases. 
D)  is proportional. 
A)  declines. 
B)  remains the same. 
C)  increases. 
D)  is proportional.

Question 17

Currently, total government expenditures in the United States:

Accepted Answer

A)  are about third of GDP. 
B)  fell by half, to 10 percent of GDP. 
C)  nearly doubled to one half of GDP. 
D)  nearly tripled to about 60 percent of GDP. 
A)  are about third of GDP. 
B)  fell by half, to 10 percent of GDP. 
C)  nearly doubled to one half of GDP. 
D)  nearly tripled to about 60 percent of GDP.

Question 18

When the tax rate is constant when a person's income rises, the tax is a:

Accepted Answer

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

Question 19

Measured as a share of the economy, government expenditures:

Accepted Answer

A)  have been between 10 and 15 percent of the U.S. economy since 1930. 
B)  have been between 20 and 25 percent of the U.S. economy since 1930. 
C)  rose from less than 10 percent in 1929 to 35 percent currently. 
D)  declined from more than 50 percent in 1929 to approximately 25 percent currently. 
A)  have been between 10 and 15 percent of the U.S. economy since 1930. 
B)  have been between 20 and 25 percent of the U.S. economy since 1930. 
C)  rose from less than 10 percent in 1929 to 35 percent currently. 
D)  declined from more than 50 percent in 1929 to approximately 25 percent currently.

Question 20

Which of the following statements is true ?

Accepted Answer

A)  A sales tax on food is a regressive tax. 
B)  The largest source of federal government tax revenue is individual income taxes. 
C)  The largest source of state and local governments tax revenue is sales and excise taxes. 
D)  All of the above are true. 
E)  None of the above are true. 
A)  A sales tax on food is a regressive tax. 
B)  The largest source of federal government tax revenue is individual income taxes. 
C)  The largest source of state and local governments tax revenue is sales and excise taxes. 
D)  All of the above are true. 
E)  None of the above are true.

Exam 16: The Public Sector

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

A person who is in the 15 percent marginal tax bracket and has a total taxable income of $100,000 will owe $15,000 in taxes.

People who often impose cost on the majority in order to benefit certain groups are called:

The federal income tax is progressive because poor people pay little or no taxes.

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

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:

Total government spending (federal, state, and local) sums to approximately:

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:

Under majority rule, the government passes _________.

Sales and excise taxes are:

Describe the major sources of tax revenue and expenditures for the federal government.

A problem with the income security program category for federal government outlays is that it excludes unemployment compensation.

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

A tax for which the rate varies directly with the income of the person taxed is known as a(n):

Exhibit 16-3 Income for two persons In Exhibit 16-3, if the income tax system is currently proportional, we know that:

When the tax structure of a nation is progressive, as incomes increase, the tax rate:

Currently, total government expenditures in the United States:

When the tax rate is constant when a person's income rises, the tax is a:

Measured as a share of the economy, government expenditures:

Which of the following statements is true ?

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

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

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters