Question 1

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a progressive tax schedule throughout?

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) A) and D)
F) None of the above

Question 2

Refer to the income tax schedule given in the table. If your taxable income increases from $4,000 to $5,000, you will encounter a marginal tax rate of

Accepted Answer

A)  10 percent.
B)  15 percent.
C)  25 percent.
D)  40 percent.E) None of the above
F) A) and B)

Question 3

From 1960 to 2018, government purchases as a percentage of U.S. output have

Accepted Answer

A)  remained approximately constant.
B)  decreased.
C)  increased slightly.
D)  increased sharply.E) A) and B)
F) A) and C)

Question 4

In the diagram, if box E represents government, box C businesses, and box A households, then flows (11) and (12) would represent

Accepted Answer

A)  goods and services.
B)  government expenditures.
C)  resources.
D)  net taxes.E) A) and D)
F) All of the above

Question 5

Refer to the graph. Assume the market for this product is in equilibrium at the intersection of D ₂ and S ₁. The shift in supply from S ₁ to S ₂ is due to an excise tax imposed on the product. How much is the tax per unit of product?

Accepted Answer

A)  $2
B)  $3
C)  $4
D)  $6E) B) and D)
F) A) and C)

Question 6

Transfer payments are about ____ percent of U.S. domestic output (as of 2018) .

Accepted Answer

A)  32
B)  5
C)  14
D)  22E) A) and B)
F) C) and D)

Question 7

The federal tax system is

Accepted Answer

A)  proportional, while state and local tax structures are largely progressive.
B)  progressive, while state and local tax structures are largely regressive.
C)  regressive, while state and local tax structures are largely proportional.
D)  regressive, while state and local tax structures are largely progressive.E) None of the above
F) B) and D)

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The table describes the relationship between income and a tax. The tax may be best described as

Accepted Answer

A)  regressive at lower income levels and progressive at higher income levels.
B)  regressive at lower income levels and proportional at higher income levels.
C)  proportional at lower income levels and regressive at higher income levels.
D)  proportional at lower income levels and progressive at higher income levels.E) A) and B)
F) A) and C)

Question 10

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Accepted Answer

A) True 
 B)False

Question 11

In 2016, 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) A) and D)
F) All of the above

Question 12

Although state and local taxes are highly progressive, federal taxation is predominantly regressive.

Accepted Answer

A) True 
 B)False

Question 13

A progressive tax is such that

Accepted Answer

A)  tax rates are higher the greater one's income.
B)  the same tax rate applies to all income receivers, so that the rich pay absolutely more taxes than the poor.
C)  entrepreneurial income is exempt from taxation.
D)  the revenues it yields are spent on transfer payments.E) A) and B)
F) C) and D)

Question 14

Only a few states use state-run lotteries to increase their revenues and pay for expenditures.

Accepted Answer

A) True 
 B)False

Question 15

The table contains five tax schedules for an economy. All figures are in billions of dollars. Which of the schedules represent(s) a regressive tax?

Accepted Answer

A)  V only
B)  III and V
C)  IV only
D)  I onlyE) B) and C)
F) None of the above

Question 16

Which of the following statements is most consistent with the benefits-received principle of taxation?

Accepted Answer

A)  A childless couple should not be required to pay taxes for the support of public schools.
B)  Prosperous corporations should pay substantial taxes even if they use few government goods and services.
C)  The best tax is the income tax.
D)  People with high incomes should pay more taxes than people with low incomes.E) All of the above
F) B) and C)

Exam 20: Public Finance: Expenditures and Taxes

Which of the following statements is most consistent with the benefits-received principle of taxation?

Correct Answer
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The table describes the relationship between income and a tax. The tax may be best described as

Correct Answer
verified

Refer to the graph. Assume the market for this product is in equilibrium at the intersection of D ₂ and S ₁. The shift in supply from S ₁ to S ₂ is due to an excise tax imposed on the product. How much is the tax per unit of product?

Correct Answer
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The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a progressive tax schedule throughout?

Correct Answer
verified

Transfer payments are about ____ percent of U.S. domestic output (as of 2018) .

Correct Answer
verified

A progressive tax is such that

Correct Answer
verified

In the diagram, if box E represents government, box C businesses, and box A households, then flows (11) and (12) would represent

Correct Answer
verified

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Correct Answer
verified

Although state and local taxes are highly progressive, federal taxation is predominantly regressive.

Correct Answer
verified

The federal tax system is

Correct Answer
verified

From 1960 to 2018, government purchases as a percentage of U.S. output have

Correct Answer
verified

Refer to the income tax schedule given in the table. If your taxable income increases from $4,000 to $5,000, you will encounter a marginal tax rate of

Correct Answer
verified

Only a few states use state-run lotteries to increase their revenues and pay for expenditures.

Correct Answer
verified

In 2016, the largest portion of federal employees were in which of the following sectors?

Correct Answer
verified

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

Correct Answer
verified

The table contains five tax schedules for an economy. All figures are in billions of dollars. Which of the schedules represent(s) a regressive tax?

Correct Answer
verified

Exam 20: Public Finance: Expenditures and Taxes

Which of the following statements is most consistent with the benefits-received principle of taxation?

Correct AnswerverifiedShow Answer

The table describes the relationship between income and a tax. The tax may be best described as

Correct AnswerverifiedShow Answer

Refer to the graph. Assume the market for this product is in equilibrium at the intersection of D ₂ and S ₁. The shift in supply from S ₁ to S ₂ is due to an excise tax imposed on the product. How much is the tax per unit of product?

Correct AnswerverifiedShow Answer

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a progressive tax schedule throughout?

Correct AnswerverifiedShow Answer

Transfer payments are about ____ percent of U.S. domestic output (as of 2018) .

Correct AnswerverifiedShow Answer

A progressive tax is such that

Correct AnswerverifiedShow Answer

In the diagram, if box E represents government, box C businesses, and box A households, then flows (11) and (12) would represent

Correct AnswerverifiedShow Answer

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Correct AnswerverifiedShow Answer

Although state and local taxes are highly progressive, federal taxation is predominantly regressive.

Correct AnswerverifiedShow Answer

The federal tax system is

Correct AnswerverifiedShow Answer

From 1960 to 2018, government purchases as a percentage of U.S. output have

Correct AnswerverifiedShow Answer

Refer to the income tax schedule given in the table. If your taxable income increases from $4,000 to $5,000, you will encounter a marginal tax rate of

Correct AnswerverifiedShow Answer

Only a few states use state-run lotteries to increase their revenues and pay for expenditures.

Correct AnswerverifiedShow Answer

In 2016, the largest portion of federal employees were in which of the following sectors?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The table contains five tax schedules for an economy. All figures are in billions of dollars. Which of the schedules represent(s) a regressive tax?

Correct AnswerverifiedShow Answer

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