Question 1

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 2

Exhibit 16-1  Income for two persons   In Exhibit 16-1, if the income tax system is proportional, 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 Elaine's tax bill will be larger. 
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 Elaine's tax bill will be larger. 
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 3

Many public choice economists believe that elected political officials would make better choices if they had to vote for higher taxes in order to adopt new spending programs.

Accepted Answer

A) True 
 B)False

Question 4

A tax that is structured so that people pay the same percentage of their income in taxes is called a(n):

Accepted Answer

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

Question 5

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):

Accepted Answer

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

Question 6

Which of the following countries devote the smallest percentage of its GDP to taxes?

Accepted Answer

A)  The United Kingdom. 
B)  Sweden. 
C)  Germany. 
D)  The United States. 
A)  The United Kingdom. 
B)  Sweden. 
C)  Germany. 
D)  The United States.

Question 7

After 1970, the share of federal spending allocated to national defense:

Accepted Answer

A)  declined sharply, while the share allocated to income security increased substantially. 
B)  rose sharply, while the share allocated to income security declined substantially. 
C)  was relatively constant, while the share allocated to income security declined modestly. 
D)  declined modestly, while the share allocated to income security was relatively constant. 
A)  declined sharply, while the share allocated to income security increased substantially. 
B)  rose sharply, while the share allocated to income security declined substantially. 
C)  was relatively constant, while the share allocated to income security declined modestly. 
D)  declined modestly, while the share allocated to income security was relatively constant.

Question 8

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.

Question 9

Public choice theory argues that one reason for rational voter ignorance is the indivisibility of public service.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Which of the following is an example of a progressive tax?

Accepted Answer

A)  The excise tax on cigarettes. 
B)  The federal tax on gasoline. 
C)  The federal personal income tax. 
D)  All of the above. 
A)  The excise tax on cigarettes. 
B)  The federal tax on gasoline. 
C)  The federal personal income tax. 
D)  All of the above.

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:

Exhibit 16-1 Income for two persons In Exhibit 16-1, if the income tax system is proportional, then:

Many public choice economists believe that elected political officials would make better choices if they had to vote for higher taxes in order to adopt new spending programs.

A tax that is structured so that people pay the same percentage of their income in taxes is called a(n):

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):

Which of the following countries devote the smallest percentage of its GDP to taxes?

After 1970, the share of federal spending allocated to national defense:

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:

Public choice theory argues that one reason for rational voter ignorance is the indivisibility of public service.

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

Which of the following is an example of a progressive tax?

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

Exam 16: The Public Sector

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:

Exhibit 16-1 Income for two persons In Exhibit 16-1, if the income tax system is proportional, then:

Many public choice economists believe that elected political officials would make better choices if they had to vote for higher taxes in order to adopt new spending programs.

A tax that is structured so that people pay the same percentage of their income in taxes is called a(n):

A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):

Which of the following countries devote the smallest percentage of its GDP to taxes?

After 1970, the share of federal spending allocated to national defense:

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:

Public choice theory argues that one reason for rational voter ignorance is the indivisibility of public service.

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

Which of the following is an example of a progressive tax?

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