Question 1

The two biggest items in the federal budget are:

Accepted Answer

A) Congress and the judiciary. 
B) national defense and agriculture. 
C) agriculture and conservation. 
D) national defense and social security. 
E) none of the above. 
A) Congress and the judiciary. 
B) national defense and agriculture. 
C) agriculture and conservation. 
D) national defense and social security. 
E) none of the above. D

Question 2

Growth in spending by all levels of government in the United States over the past half-century:

Accepted Answer

A) has kept pace with neither tax revenues nor real GDP. 
B) has kept pace, except for an occasional wartime surge, with both tax revenues and real GDP. 
C) has kept pace, except for an occasional wartime surge, with both tax revenues and nominal GDP. 
D) has surged at a rate that has significantly exceeded the rate of growth of nominal GDP. 
E) has surged at a rate that has significantly exceeded the rate of growth of tax receipts. 
A) has kept pace with neither tax revenues nor real GDP. 
B) has kept pace, except for an occasional wartime surge, with both tax revenues and real GDP. 
C) has kept pace, except for an occasional wartime surge, with both tax revenues and nominal GDP. 
D) has surged at a rate that has significantly exceeded the rate of growth of nominal GDP. 
E) has surged at a rate that has significantly exceeded the rate of growth of tax receipts. C

Question 3

Of the three levels of government, state government has generally been the least important in terms of total expenditure.

Accepted Answer

A) True 
 B)False  True

Question 4

On average over the past half-century, tax receipts in the United States have:

Accepted Answer

A) grown at a rate that was significantly slower than expenditure. 
B) grown at a rate that was nearly the same as expenditure. 
C) grown at a rate that matched the rate of growth of real GDP. 
D) grown at a rate that matched the rate of growth of nominal GDP. 
E) held remarkably stable despite taxpayer protests to the contrary. 
A) grown at a rate that was significantly slower than expenditure. 
B) grown at a rate that was nearly the same as expenditure. 
C) grown at a rate that matched the rate of growth of real GDP. 
D) grown at a rate that matched the rate of growth of nominal GDP. 
E) held remarkably stable despite taxpayer protests to the contrary.

Question 5

The cost of all levels of government in the United States has grown more than 400-fold since 1913.

Accepted Answer

A) True 
 B)False

Question 6

Excise taxes are, in general, regarded as regressive, and one levied on fur coats would be no exception.

Accepted Answer

A) True 
 B)False

Question 7

The working poor are regressively taxed, but since more expenditure goes to them, the net tax burden after transfers may actually be progressive.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an appropriate economic goal for government in a mixed economy?

Accepted Answer

A) Improving economic efficiency. 
B) Reducing economic inequality. 
C) Stabilizing the economy through macroeconomic policies. 
D) Conducting international economic policy. 
E) All of the above. 
A) Improving economic efficiency. 
B) Reducing economic inequality. 
C) Stabilizing the economy through macroeconomic policies. 
D) Conducting international economic policy. 
E) All of the above.

Question 9

A major criticism of the general property tax is that it violates principles of horizontal equity.

Accepted Answer

A) True 
 B)False

Question 10

Use the following to answer questions :
Figure 16-1  
-What type of event could move the economy from point E to G in Figure 16-1?

Accepted Answer

A) A tax which redistributes income from rich to poor. 
B) Massive highway construction 
C) Tax on rich which subsidizes income support programs. 
D) A and B 
E) A and C 
A) A tax which redistributes income from rich to poor. 
B) Massive highway construction 
C) Tax on rich which subsidizes income support programs. 
D) A and B 
E) A and C

Question 11

Use the following to answer questions :
Figure 16-1  
-Which point in Figure 16-1 could represent an income distribution under a laissez-faire economy?

Accepted Answer

A) E 
B) F 
C) G 
D) D 
E) All of the above. 
A) E 
B) F 
C) G 
D) D 
E) All of the above.

Question 12

The largest single source of total tax receipts of the federal government is:

Accepted Answer

A) personal income taxation 
B) death and gift taxation. 
C) corporation income taxation. 
D) sales taxation. 
E) social security taxation. 
A) personal income taxation 
B) death and gift taxation. 
C) corporation income taxation. 
D) sales taxation. 
E) social security taxation.

Question 13

Use the following to answer questions :
Figure 16-1  
-What type of event could move the economy from E to D in Figure 16-1?

Accepted Answer

A) Inefficient dictator takes over government. 
B) Nuclear war. 
C) New income taxes on A. 
D) A and B 
E) None of the above. 
A) Inefficient dictator takes over government. 
B) Nuclear war. 
C) New income taxes on A. 
D) A and B 
E) None of the above.

Question 14

Transfer payments hardly ever create inefficiencies because they simply transfer money from the hands of one set of people and deliver into the hands of another set of people.

Accepted Answer

A) True 
 B)False

Question 15

As people's incomes rise, a progressive tax is best described as taking:

Accepted Answer

A) an increasing amount of tax. 
B) the same amount of tax. 
C) the same percent of income as tax 
D) an increasing percent of income as tax. 
E) a decreasing percent of income as tax. 
A) an increasing amount of tax. 
B) the same amount of tax. 
C) the same percent of income as tax 
D) an increasing percent of income as tax. 
E) a decreasing percent of income as tax.

Question 16

When monopolies or oligopolies collude to fix prices, government can apply anti-trust policies or regulation.

Accepted Answer

A) True 
 B)False

Question 17

Before the twentieth century, local government was by far the most important of the three levels of government.

Accepted Answer

A) True 
 B)False

Question 18

When we speak of the incidence of a tax, we are:

Accepted Answer

A) referring to the group upon whom it is directly levied. 
B) asking whether that tax is progressive or regressive in nature. 
C) measuring the extent to which the tax tends to reduce incentives in the group that pays it. 
D) referring to the group that receives the burden of the tax bill, regardless of whether or not it actually makes the money payment to the government. 
E) measuring the extent to which the tax brings in a steady amount of money to the government in both prosperity and depression. 
A) referring to the group upon whom it is directly levied. 
B) asking whether that tax is progressive or regressive in nature. 
C) measuring the extent to which the tax tends to reduce incentives in the group that pays it. 
D) referring to the group that receives the burden of the tax bill, regardless of whether or not it actually makes the money payment to the government. 
E) measuring the extent to which the tax brings in a steady amount of money to the government in both prosperity and depression.

Question 19

An example of a transfer payment is:

Accepted Answer

A) a check to a hospital for payment of a bill owed by a senior citizen covered by Medicare. 
B) a mail carrier's wages. 
C) payment to Boeing Aircraft for an intercontinental bomber. 
D) the lunch provided for a cleaning person. 
E) none of the above. 
A) a check to a hospital for payment of a bill owed by a senior citizen covered by Medicare. 
B) a mail carrier's wages. 
C) payment to Boeing Aircraft for an intercontinental bomber. 
D) the lunch provided for a cleaning person. 
E) none of the above.

Question 20

Value-added taxes are:

Accepted Answer

A) collected only at the sale of the final product. 
B) income taxes. 
C) corporate taxes. 
D) based upon an ability-to-pay principle. 
E) collected at each stage of the production process. 
A) collected only at the sale of the final product. 
B) income taxes. 
C) corporate taxes. 
D) based upon an ability-to-pay principle. 
E) collected at each stage of the production process.

The two biggest items in the federal budget are:

Growth in spending by all levels of government in the United States over the past half-century:

Of the three levels of government, state government has generally been the least important in terms of total expenditure.

On average over the past half-century, tax receipts in the United States have:

The cost of all levels of government in the United States has grown more than 400-fold since 1913.

Excise taxes are, in general, regarded as regressive, and one levied on fur coats would be no exception.

The working poor are regressively taxed, but since more expenditure goes to them, the net tax burden after transfers may actually be progressive.

Which of the following is an appropriate economic goal for government in a mixed economy?

A major criticism of the general property tax is that it violates principles of horizontal equity.

Use the following to answer questions : Figure 16-1 -What type of event could move the economy from point E to G in Figure 16-1?

Use the following to answer questions : Figure 16-1 -Which point in Figure 16-1 could represent an income distribution under a laissez-faire economy?

The largest single source of total tax receipts of the federal government is:

Use the following to answer questions : Figure 16-1 -What type of event could move the economy from E to D in Figure 16-1?

Transfer payments hardly ever create inefficiencies because they simply transfer money from the hands of one set of people and deliver into the hands of another set of people.

As people's incomes rise, a progressive tax is best described as taking:

When monopolies or oligopolies collude to fix prices, government can apply anti-trust policies or regulation.

Before the twentieth century, local government was by far the most important of the three levels of government.

When we speak of the incidence of a tax, we are:

An example of a transfer payment is:

Value-added taxes are:

The Central Concepts of Economics

The Modern Mixed Economy

Basic Elements of Supply and Demand Part

Supply and Demand: Elasticity and Applications

Demand and Consumer Behavior

Production and Business Organization

Analysis of Costs

Analysis of Perfectly Competitive Markets

Imperfect Competition and Monopoly

Competition Among the Few

Economics of Uncertainty

The Labor Market

Land, Natural Resources, and the Environment

Capital, Interest, and Profits Part Four: Applications of Economic Principles

Government Taxation and Expenditure

International Trade

Overview of Macroeconomics

Geometrical Analysis of Consumer Equilibrium

Production Cost Theory and Decisions of the Firm

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Exam 16: Efficiency Vsequality: The Big Trade-Off

The two biggest items in the federal budget are:

Growth in spending by all levels of government in the United States over the past half-century:

Of the three levels of government, state government has generally been the least important in terms of total expenditure.

On average over the past half-century, tax receipts in the United States have:

The cost of all levels of government in the United States has grown more than 400-fold since 1913.

Excise taxes are, in general, regarded as regressive, and one levied on fur coats would be no exception.

The working poor are regressively taxed, but since more expenditure goes to them, the net tax burden after transfers may actually be progressive.

Which of the following is an appropriate economic goal for government in a mixed economy?

A major criticism of the general property tax is that it violates principles of horizontal equity.

Use the following to answer questions : Figure 16-1 -What type of event could move the economy from point E to G in Figure 16-1?

Use the following to answer questions : Figure 16-1 -Which point in Figure 16-1 could represent an income distribution under a laissez-faire economy?

The largest single source of total tax receipts of the federal government is:

Use the following to answer questions : Figure 16-1 -What type of event could move the economy from E to D in Figure 16-1?

Transfer payments hardly ever create inefficiencies because they simply transfer money from the hands of one set of people and deliver into the hands of another set of people.

As people's incomes rise, a progressive tax is best described as taking:

When monopolies or oligopolies collude to fix prices, government can apply anti-trust policies or regulation.

Before the twentieth century, local government was by far the most important of the three levels of government.

When we speak of the incidence of a tax, we are:

An example of a transfer payment is:

Value-added taxes are:

The Central Concepts of Economics

The Modern Mixed Economy

Basic Elements of Supply and Demand Part

Supply and Demand: Elasticity and Applications

Demand and Consumer Behavior

Production and Business Organization

Analysis of Costs

Analysis of Perfectly Competitive Markets

Imperfect Competition and Monopoly

Competition Among the Few

Economics of Uncertainty

The Labor Market

Land, Natural Resources, and the Environment

Capital, Interest, and Profits Part Four: Applications of Economic Principles

Government Taxation and Expenditure

International Trade

Overview of Macroeconomics

Geometrical Analysis of Consumer Equilibrium

Production Cost Theory and Decisions of the Firm

Filters