Question 1

In the U.S., the taxes mostly come from the rich and government spending mostly goes to programs that benefit the rich.

Accepted Answer

A) True 
 B)False

Question 2

With a proportional tax, higher-income persons will pay

Accepted Answer

A)  the same amount of taxes as lower-income persons.
B)  a bigger amount in taxes compared to lower-income persons.
C)  a higher proportion of their income in taxes than lower-income persons.
D)  a higher marginal tax rate as their incomes rise.E) All of the above
F) C) and D)

Question 3

If an income tax is progressive, the average tax rate will increase as incomes increase.

Accepted Answer

A) True 
 B)False

Question 4

(Advanced analysis)  The equations for the demand and supply curves for a particular product are P = 10 − 0.4Q and P = 2 + 0.4Q, where P is price and Q is quantity expressed in units of 100.After an excise tax is imposed on the product, the supply equation is P = 3 + 0.4Q.The excise tax on each unit of the product

Accepted Answer

A)  is $1.
B)  is $2.
C)  is $3.
D)  cannot be determined with the information given.E) A) and B)
F) A) and C)

Question 5

Joe complains that 32 percent of his income last year went to taxes.He is referring to his

Accepted Answer

A)  average tax rate.
B)  marginal tax rate.
C)  proportional tax rate.
D)  progressive tax rate.E) B) and C)
F) None of the above

Question 6

The supply curve for a product has infinite elasticity.An excise tax is levied on the product.The likely effect will be to

Accepted Answer

A)  reduce the amount the producer receives for each unit sold by the amount of the tax.
B)  increase the price the consumer pays per unit by the amount of the tax.
C)  increase the price to consumers by an amount less than the tax.
D)  increase the amount received by producers by less than the tax.E) B) and D)
F) B) and C)

Question 7

In 2013, the largest portion of federal employees were in which of the following sectors?

Accepted Answer

A)  education and health care
B)  police and natural resources
C)  postal service and national defense
D)  judicial, police, and administrationE) All of the above
F) B) and C)

Question 8

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Accepted Answer

A) True 
 B)False

Question 9

The average tax rate is

Accepted Answer

A)  equal to the change in taxes/change in taxable income.
B)  equal to total taxes/total taxable income.
C)  the sum of the marginal tax rate and the rate of transfer payments.
D)  the tax on incremental income less the tax on total income.E) None of the above
F) A) and D)

Question 10

Proprietary income refers to

Accepted Answer

A)  revenue flowing to the government from taxes.
B)  money borrowed by the government to finance its operations.
C)  revenue generated by government-run businesses.
D)  transfer payments from the government to the owners of property resources.E) None of the above
F) A) and C)

Question 11

In 2015, corporate income taxes contributed about what percentage of U.S.federal tax revenues?

Accepted Answer

A)  10 percent
B)  25 percent
C)  50 percent
D)  70 percentE) B) and C)
F) A) and B)

Question 12

The marginal tax rate is

Accepted Answer

A)  less than the average tax rate when a tax is progressive.
B)  calculated by dividing total taxes paid by one's total taxable income.
C)  the percentage of one's total income that is paid in taxes.
D)  the percentage of an increment of income that is paid in taxes.E) A) and B)
F) A) and C)

Question 13

The three most important sources of federal tax revenue in order of descending importance are

Accepted Answer

A)  sales, payroll, and personal income taxes.
B)  personal income, corporate income, and sales taxes.
C)  personal income, corporate income, and payroll taxes.
D)  personal income, payroll, and corporate income taxes.Difficulty: 01 EasyE) None of the above
F) A) and D) D

Question 14

At the state and local levels of the U.S.government, a majority of government employees work in which of the following areas?

Accepted Answer

A)  postal service
B)  education
C)  hospitals and other health care
D)  police and correctionsE) None of the above
F) B) and C)

Question 15

(Consider This)  Which of the following claims is not made by defenders of lotteries?

Accepted Answer

A)  Lotteries are a relatively painless way to fund important government services.
B)  Lotteries help reduce organized crime by providing an alternative to illegal gambling.
C)  Lotteries are preferable to taxes because they are voluntary.
D)  Lotteries are progressive in nature, with higher income families playing more frequently.E) A) and B)
F) All of the above

Question 16

More than 50 percent of local and state employees are employed in the education sector.

Accepted Answer

A) True 
 B)False  True

Question 17

Assume you pay a tax of $4,000 on a taxable income of $24,000.If your taxable income were $30,000, your tax payment would be $5,000.This suggests that the tax is

Accepted Answer

A)  progressive.
B)  proportional.
C)  regressive.
D)  discriminatory.E) A) and B)
F) None of the above

Question 18

From 1960 to 2015, as percentages of U.S.output, government purchases have

Accepted Answer

A)  declined, but transfer payments have increased significantly.
B)  remained about the same, while transfer payments have increased slightly.
C)  increased sharply, but transfer payments have also decreased significantly.
D)  increased slightly, while transfer payments have remained about the same.E) None of the above
F) A) and B)

Question 19

Which of the following statements about government borrowing is not true?

Accepted Answer

A)  It provides the government the ability to maintain spending levels during economic downturns.
B)  "Crowding out" of private investments is a major opportunity cost of government borrowing.
C)  Its opportunity cost is likely to be quite high during an economic downturn.
D)  A bigger budget deficit will result in a bigger amount of government borrowing.E) B) and C)
F) None of the above C

Question 20

If government levies a tax or fee on hunting licenses and uses the resulting revenue for wildlife stocking programs, this would be an example of

Accepted Answer

A)  a progressive tax.
B)  a regressive tax.
C)  the ability-to-pay principle of taxation.
D)  the benefits-received principle of taxation.E) A) and B)
F) B) and D)

Exam 20: Public Finance: Expenditures and Taxes

In the U.S., the taxes mostly come from the rich and government spending mostly goes to programs that benefit the rich.

Correct Answer
verified

With a proportional tax, higher-income persons will pay

Correct Answer
verified

If an income tax is progressive, the average tax rate will increase as incomes increase.

Correct Answer
verified

Correct Answer
verified

Joe complains that 32 percent of his income last year went to taxes.He is referring to his

Correct Answer
verified

The supply curve for a product has infinite elasticity.An excise tax is levied on the product.The likely effect will be to

Correct Answer
verified

In 2013, the largest portion of federal employees were in which of the following sectors?

Correct Answer
verified

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Correct Answer
verified

The average tax rate is

Correct Answer
verified

Proprietary income refers to

Correct Answer
verified

In 2015, corporate income taxes contributed about what percentage of U.S.federal tax revenues?

Correct Answer
verified

The marginal tax rate is

Correct Answer
verified

The three most important sources of federal tax revenue in order of descending importance are

Correct Answer
verified
D

At the state and local levels of the U.S.government, a majority of government employees work in which of the following areas?

Correct Answer
verified

(Consider This) Which of the following claims is not made by defenders of lotteries?

Correct Answer
verified

More than 50 percent of local and state employees are employed in the education sector.

Correct Answer
verified
True

Assume you pay a tax of $4,000 on a taxable income of $24,000.If your taxable income were $30,000, your tax payment would be $5,000.This suggests that the tax is

Correct Answer
verified

From 1960 to 2015, as percentages of U.S.output, government purchases have

Correct Answer
verified

Which of the following statements about government borrowing is not true?

Correct Answer
verified
C

If government levies a tax or fee on hunting licenses and uses the resulting revenue for wildlife stocking programs, this would be an example of

Correct Answer
verified

Exam 20: Public Finance: Expenditures and Taxes

In the U.S., the taxes mostly come from the rich and government spending mostly goes to programs that benefit the rich.

Correct AnswerverifiedShow Answer

With a proportional tax, higher-income persons will pay

Correct AnswerverifiedShow Answer

If an income tax is progressive, the average tax rate will increase as incomes increase.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Joe complains that 32 percent of his income last year went to taxes.He is referring to his

Correct AnswerverifiedShow Answer

The supply curve for a product has infinite elasticity.An excise tax is levied on the product.The likely effect will be to

Correct AnswerverifiedShow Answer

In 2013, the largest portion of federal employees were in which of the following sectors?

Correct AnswerverifiedShow Answer

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Correct AnswerverifiedShow Answer

The average tax rate is

Correct AnswerverifiedShow Answer

Proprietary income refers to

Correct AnswerverifiedShow Answer

In 2015, corporate income taxes contributed about what percentage of U.S.federal tax revenues?

Correct AnswerverifiedShow Answer

The marginal tax rate is

Correct AnswerverifiedShow Answer

The three most important sources of federal tax revenue in order of descending importance are

Correct AnswerverifiedD

At the state and local levels of the U.S.government, a majority of government employees work in which of the following areas?

Correct AnswerverifiedShow Answer

(Consider This) Which of the following claims is not made by defenders of lotteries?

Correct AnswerverifiedShow Answer

More than 50 percent of local and state employees are employed in the education sector.

Correct AnswerverifiedTrue

Assume you pay a tax of $4,000 on a taxable income of $24,000.If your taxable income were $30,000, your tax payment would be $5,000.This suggests that the tax is

Correct AnswerverifiedShow Answer

From 1960 to 2015, as percentages of U.S.output, government purchases have

Correct AnswerverifiedShow Answer

Which of the following statements about government borrowing is not true?

Correct AnswerverifiedC

If government levies a tax or fee on hunting licenses and uses the resulting revenue for wildlife stocking programs, this would be an example of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified