Question 1

Fiscal policy is another name for the government's attempt to balance the budget.

Accepted Answer

A) True 
 B)False

Question 2

The cost of government at all levels has grown in the United States since 1913.

Accepted Answer

A) True 
 B)False

Question 3

A general sales tax is:

Accepted Answer

A) a progressive tax because it applies to luxuries as well as necessities 
B) a progressive tax because wealthy people spend more than poor people. 
C) a regressive tax because wealthy people spend a smaller percentage of their total income on taxed commodities. 
D) a regressive tax because more money is collected from a poor person than from a rich one. 
E) a proportional tax because everybody pays the same tax percentage on each purchase. 
A) a progressive tax because it applies to luxuries as well as necessities 
B) a progressive tax because wealthy people spend more than poor people. 
C) a regressive tax because wealthy people spend a smaller percentage of their total income on taxed commodities. 
D) a regressive tax because more money is collected from a poor person than from a rich one. 
E) a proportional tax because everybody pays the same tax percentage on each purchase.

Question 4

A sales tax on a consumer good on which the wealthy spend a higher proportion of their income than the poor would be progressive.

Accepted Answer

A) True 
 B)False

Question 5

Any tax whose burden depends on the outcome of an economic decision can be expected to create an economic distortion.

Accepted Answer

A) True 
 B)False

Question 6

Welfare payments are an example of a redistributional government policy.

Accepted Answer

A) True 
 B)False

Question 7

Education is the biggest single item in the budget of local government.

Accepted Answer

A) True 
 B)False

Question 8

Progressive income taxes tend, through redistribution of income, to expand purchasing power.

Accepted Answer

A) True 
 B)False

Question 9

The best technical description of a progressive tax is a:

Accepted Answer

A) tax which takes more money from the rich than from the poor. 
B) tax likely to discourage incentive. 
C) more equitable tax than a regressive one. 
D) tax which takes a higher proportion of extra dollars received as income rises. 
E) tax which falls directly on those in the high income brackets. 
A) tax which takes more money from the rich than from the poor. 
B) tax likely to discourage incentive. 
C) more equitable tax than a regressive one. 
D) tax which takes a higher proportion of extra dollars received as income rises. 
E) tax which falls directly on those in the high income brackets.

Question 10

The U.S.Social Security tax is designed to be progressive.

Accepted Answer

A) True 
 B)False

Question 11

Government transfer payments are basically defined as:

Accepted Answer

A) those which require service on the part of the recipient. 
B) those for which the recipient gives no concurrent service in return. 
C) receipts which do not increase the total purchasing power of all recipients. 
D) intergovernmental flows that do not affect individuals directly. 
E) that part of government expenditures on goods and services not financed by taxes. 
A) those which require service on the part of the recipient. 
B) those for which the recipient gives no concurrent service in return. 
C) receipts which do not increase the total purchasing power of all recipients. 
D) intergovernmental flows that do not affect individuals directly. 
E) that part of government expenditures on goods and services not financed by taxes.

Question 12

Which of the following taxes, as structured in the United States, is the best example of ability-to-pay taxation?

Accepted Answer

A) The federal excise tax on cigarettes. 
B) The federal corporate income tax. 
C) A state imposed highway user tax. 
D) A proportional state sales tax. 
E) The federal personal income tax. 
A) The federal excise tax on cigarettes. 
B) The federal corporate income tax. 
C) A state imposed highway user tax. 
D) A proportional state sales tax. 
E) The federal personal income tax.

Question 13

State and local governments spend more each year on public education than they do for police and fire protection.

Accepted Answer

A) True 
 B)False

Question 14

Inefficient government can cause an economy to operate below its production possibility frontier.

Accepted Answer

A) True 
 B)False

Question 15

Double-taxation in the U.S.tax system generally refers to:

Accepted Answer

A) the fact that both employers and employees pay a payroll tax. 
B) the taxation as regular income of dividends paid to stockholders out of profits upon which taxes have already been paid. 
C) the occasional imposition of a tax surcharge on the personal income tax paid by Americans to their federal government. 
D) the doubling of the corporate profits tax rate as corporations' incomes climb above $100,000. 
E) none of the above. 
A) the fact that both employers and employees pay a payroll tax. 
B) the taxation as regular income of dividends paid to stockholders out of profits upon which taxes have already been paid. 
C) the occasional imposition of a tax surcharge on the personal income tax paid by Americans to their federal government. 
D) the doubling of the corporate profits tax rate as corporations' incomes climb above $100,000. 
E) none of the above.

Question 16

A shift from progressive direct taxes to a federal sales or value-added tax would probably encourage investment more than consumption.

Accepted Answer

A) True 
 B)False

Question 17

"Fiscal policy" is the economist's name for tax and expenditure policies in general.

Accepted Answer

A) True 
 B)False

Question 18

Government intervention is necessary to control breakdowns in the market mechanism.

Accepted Answer

A) True 
 B)False

Question 19

Laissez-faire policies in the United States gave way to some regulatory activity in part in response to problems with:

Accepted Answer

A) hazards in the workplace. 
B) hazards facing consumers. 
C) information that kept buyers from knowing completely the value of their purchases. 
D) discrimination in the workplace. 
E) all of the above. 
A) hazards in the workplace. 
B) hazards facing consumers. 
C) information that kept buyers from knowing completely the value of their purchases. 
D) discrimination in the workplace. 
E) all of the above.

Question 20

The principal source of local government revenue is:

Accepted Answer

A) property taxation. 
B) sales taxation. 
C) income and payroll taxation. 
D) aid from the federal government. 
E) none of the above. 
A) property taxation. 
B) sales taxation. 
C) income and payroll taxation. 
D) aid from the federal government. 
E) none of the above.

Fiscal policy is another name for the government's attempt to balance the budget.

The cost of government at all levels has grown in the United States since 1913.

A general sales tax is:

A sales tax on a consumer good on which the wealthy spend a higher proportion of their income than the poor would be progressive.

Any tax whose burden depends on the outcome of an economic decision can be expected to create an economic distortion.

Welfare payments are an example of a redistributional government policy.

Education is the biggest single item in the budget of local government.

Progressive income taxes tend, through redistribution of income, to expand purchasing power.

The best technical description of a progressive tax is a:

The U.S.Social Security tax is designed to be progressive.

Government transfer payments are basically defined as:

Which of the following taxes, as structured in the United States, is the best example of ability-to-pay taxation?

State and local governments spend more each year on public education than they do for police and fire protection.

Inefficient government can cause an economy to operate below its production possibility frontier.

Double-taxation in the U.S.tax system generally refers to:

A shift from progressive direct taxes to a federal sales or value-added tax would probably encourage investment more than consumption.

"Fiscal policy" is the economist's name for tax and expenditure policies in general.

Government intervention is necessary to control breakdowns in the market mechanism.

Laissez-faire policies in the United States gave way to some regulatory activity in part in response to problems with:

The principal source of local government revenue is:

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

Exam 16: Efficiency Vsequality: The Big Trade-Off

Fiscal policy is another name for the government's attempt to balance the budget.

The cost of government at all levels has grown in the United States since 1913.

A general sales tax is:

A sales tax on a consumer good on which the wealthy spend a higher proportion of their income than the poor would be progressive.

Any tax whose burden depends on the outcome of an economic decision can be expected to create an economic distortion.

Welfare payments are an example of a redistributional government policy.

Education is the biggest single item in the budget of local government.

Progressive income taxes tend, through redistribution of income, to expand purchasing power.

The best technical description of a progressive tax is a:

The U.S.Social Security tax is designed to be progressive.

Government transfer payments are basically defined as:

Which of the following taxes, as structured in the United States, is the best example of ability-to-pay taxation?

State and local governments spend more each year on public education than they do for police and fire protection.

Inefficient government can cause an economy to operate below its production possibility frontier.

Double-taxation in the U.S.tax system generally refers to:

A shift from progressive direct taxes to a federal sales or value-added tax would probably encourage investment more than consumption.

"Fiscal policy" is the economist's name for tax and expenditure policies in general.

Government intervention is necessary to control breakdowns in the market mechanism.

Laissez-faire policies in the United States gave way to some regulatory activity in part in response to problems with:

The principal source of local government revenue is:

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