Question 1

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 2

If a tax rate falls as a person's income rises, the tax is a:

Accepted Answer

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

Question 3

Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?

Accepted Answer

A)  Income security. 
B)  National defense. 
C)  Education and health. 
D)  Interest on the national debt. 
A)  Income security. 
B)  National defense. 
C)  Education and health. 
D)  Interest on the national debt.

Question 4

If a person is taxed $100 on an income of $1,000, taxed $200 on an income of $2,000, and taxed $300 on an income of $3,000, this person is paying a:

Accepted Answer

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

Question 5

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 the above. 
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 the above.

Question 6

Which of the following answers best reflects the ability-to-pay philosophy of taxation?

Accepted Answer

A)  Property tax. 
B)  Progressive income tax. 
C)  Excise tax on gasoline. 
D)  Excise tax on cigarettes. 
A)  Property tax. 
B)  Progressive income tax. 
C)  Excise tax on gasoline. 
D)  Excise tax on cigarettes.

Question 7

Describe the two basic philosophies of taxation fairness.

Accepted Answer

The two basic philosophies of taxation f

Question 8

People who often create benefits for the minority and impose the cost on the majority are called:

Accepted Answer

A)  fair-interest groups. 
B)  encounter groups. 
C)  laissez-faire groups. 
D)  special-interest groups. 
A)  fair-interest groups. 
B)  encounter groups. 
C)  laissez-faire groups. 
D)  special-interest groups.

Question 9

Since World War II, most of the growth in U.S. government outlays is attributable to rapidly growing federal government transfer programs.

Accepted Answer

A) True 
 B)False

Question 10

The federal personal income tax was designed to be a:

Accepted Answer

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

Question 11

The amount of government expenditures on a project or program should continue to increase for as long as the marginal benefits exceed the marginal costs.

Accepted Answer

A) True 
 B)False

Question 12

Sharon pays a tax of $4,000 on her income of $40,000, while Brad pays a tax of $1,000 on his income of $20,000. This tax is:

Accepted Answer

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

Question 13

The benefits-received principle of taxation is most evident in:

Accepted Answer

A)  progressive tax rates. 
B)  excise taxes on gasoline. 
C)  the personal income tax. 
D)  the corporate income tax. 
A)  progressive tax rates. 
B)  excise taxes on gasoline. 
C)  the personal income tax. 
D)  the corporate income tax.

Question 14

Currently, _________ represents the largest single category of federal spending?​

Accepted Answer

A)  ​ net interest on the national debt 
B)  ​defense 
C)  ​ income security 
D)  ​education and health 
A)  ​ net interest on the national debt 
B)  ​defense 
C)  ​ income security 
D)  ​education and health

Question 15

A tax system in which the tax rate on everyone's first $10,000 of income is 10 percent, the tax rate on everyone's second $10,000 of income is 15 percent, and the tax rate on all income over $20,000 is 25 percent is a(n):

Accepted Answer

A)  proportional tax. 
B)  equitable tax. 
C)  head tax. 
D)  unit tax. 
E)  progressive tax. 
A)  proportional tax. 
B)  equitable tax. 
C)  head tax. 
D)  unit tax. 
E)  progressive tax.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

Voters may choose to remain uninformed about an issue because of:

Accepted Answer

A)  the special-interest effect. 
B)  rational ignorance. 
C)  bureaucratic inefficiency. 
D)  the shortsightedness effect. 
A)  the special-interest effect. 
B)  rational ignorance. 
C)  bureaucratic inefficiency. 
D)  the shortsightedness effect.

Question 19

Which of the following categories accounted for the third largest percentage of total federal government expenditures?

Accepted Answer

A)  Education and health. 
B)  National defense. 
C)  Income security. 
D)  Interest on the national debt. 
A)  Education and health. 
B)  National defense. 
C)  Income security. 
D)  Interest on the national debt.

Question 20

Rational ignorance might explain low voter turnout because people apply marginal analysis to voting.

Accepted Answer

A) True 
 B)False

Exam 16: The Public Sector

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

If a tax rate falls as a person's income rises, the tax is a:

Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?

If a person is taxed $100 on an income of $1,000, taxed $200 on an income of $2,000, and taxed $300 on an income of $3,000, this person is paying a:

The social security tax is a:

Which of the following answers best reflects the ability-to-pay philosophy of taxation?

Describe the two basic philosophies of taxation fairness.

People who often create benefits for the minority and impose the cost on the majority are called:

Since World War II, most of the growth in U.S. government outlays is attributable to rapidly growing federal government transfer programs.

The federal personal income tax was designed to be a:

The amount of government expenditures on a project or program should continue to increase for as long as the marginal benefits exceed the marginal costs.

Sharon pays a tax of $4,000 on her income of $40,000, while Brad pays a tax of $1,000 on his income of $20,000. This tax is:

The benefits-received principle of taxation is most evident in:

Currently, _________ represents the largest single category of federal spending?​

A tax system in which the tax rate on everyone's first $10,000 of income is 10 percent, the tax rate on everyone's second $10,000 of income is 15 percent, and the tax rate on all income over $20,000 is 25 percent is a(n):

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

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

Voters may choose to remain uninformed about an issue because of:

Which of the following categories accounted for the third largest percentage of total federal government expenditures?

Rational ignorance might explain low voter turnout because people apply marginal analysis to voting.

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

Currently, _________ represents the largest single category of federal spending?