Question 1

The tax rates embodied in the federal personal income tax are such that

Accepted Answer

A)   a rising absolute amount, but a declining proportion, of income is paid in taxes.
B)   the marginal and average tax rates are equal, making the tax progressive.
C)   the average tax rate rises more rapidly than does the marginal tax rate as income rises.
D)   the marginal tax rate is higher than the average tax rate, causing the average tax rate to rise as income rises.E) B) and D)
F) B) and C)

Question 2

The largest portion of federal employees work in the national defense sector.

Accepted Answer

A) True 
 B)False

Question 3

"Deficit spending" refers to a situation where the government

Accepted Answer

A)   spends borrowed funds.
B)   collects more tax revenues than it spends.
C)   does not need to borrow funds.
D)   is spending less than the year before.E) None of the above
F) B) and C)

Question 4

Which of the following statements about state lotteries is false?

Accepted Answer

A)   State lotteries are monopolies, with competing private lotteries banned.
B)   State lotteries are highly controversial, with critics and defenders still debating their merits.
C)   Fewer than half of the states in the U.S. have state lotteries because of their controversial nature.
D)   The payout rates of state lotteries are substantially lower than in private betting operations like casinos.E) B) and C)
F) A) and C)

Question 5

The federal payroll (Social Security)  tax

Accepted Answer

A)   increases the progressivity of the federal tax system.
B)   offsets some of the progressivity of the federal tax system.
C)   offsets some of the regressivity of the federal tax system.
D)   decreases the proportionality of the federal tax system.E) A) and C)
F) C) and D)

Question 6

The more inelastic are demand and supply, the

Accepted Answer

A)   larger is the efficiency loss of an excise tax.
B)   smaller is the efficiency loss of an excise tax.
C)   higher is the proportion of an excise tax paid by consumers.
D)   smaller is the proportion of an excise tax paid by producers.E) B) and D)
F) A) and B)

Question 7

In 2013, U.S. governments (local, state, and federal)  employed approximately how many million workers?

Accepted Answer

A)   16.0
B)   19.4
C)   21.9
D)   23.5E) A) and B)
F) None of the above

Question 8

The so-called Tax Freedom Day of each year recognizes the day that

Accepted Answer

A)   the federal government requires taxpayers to submit their taxes to the Internal Revenue Service.
B)   charitable contributions were made legal under the tax codes of the United States government.
C)   the U.S. Supreme Court ruled that double taxation of income was illegal for corporations and businesses.
D)   the average worker had earned enough income to pay his or her share of government spending for that year.E) B) and C)
F) B) and D)

Question 9

Government purchases of goods and services are

Accepted Answer

A)   nonexhaustive because they do not directly absorb resources and account for production.
B)   exhaustive because they directly absorb or employ resources and account for production.
C)   both exhaustive and nonexhaustive because in some cases they do directly absorb resources or account for production and in other cases they do not.
D)   neither exhaustive nor nonexhaustive because of the tax revenues that finance these purchases.E) B) and C)
F) A) and B)

Question 10

The basic tax rate on taxable corporate income is

Accepted Answer

A)   15 percent.
B)   22 percent.
C)   35 percent.
D)   52 percent.E) A) and C)
F) B) and C)

Question 11

The U.S. federal expenditures for "pensions and income security" are dominated by

Accepted Answer

A)   housing subsidies.
B)   unemployment benefits.
C)   food stamps.
D)   Social Security payments.E) None of the above
F) C) and D)

Question 12

In general, the buyers will tend to pay a bigger share of a tax on a good when

Accepted Answer

A)   the price elasticities of supply and demand are low.
B)   the price elasticities of supply and demand are high.
C)   the price elasticity of supply is low and the price elasticity of demand is high.
D)   the price elasticity of supply is high and the price elasticity of demand is low.E) A) and B)
F) A) and C)

Question 13

About two-thirds of all federal spending is for national defense.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1) . If the incidence of the tax is such that the consumers of X pay $1.85 of the tax and the producers pay $0.15, we can conclude that the

Accepted Answer

A)   supply of X is highly inelastic.
B)   supply of X is highly elastic.
C)   demand for X is highly inelastic.
D)   demand for X is highly elastic.E) A) and D)
F) A) and C)

Question 15

In the U.S., the progressive income-tax system substantially redistributes income.

Accepted Answer

A) True 
 B)False

Question 16

The interest on public debt is more than 10 percent of federal government expenditures.

Accepted Answer

A) True 
 B)False

Question 17

The largest category of federal government expenditures is national defense.

Accepted Answer

A) True 
 B)False

Question 18

Social Security contributions are part of

Accepted Answer

A)   excise taxes.
B)   payroll taxes.
C)   reverse taxes.
D)   indirect taxes.E) A) and D)
F) All of the above

Question 19

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) B) and C)
F) A) and C)

Question 20

Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1) . If the incidence of the tax is such that the producers of X pay $1.90 of the tax and the consumers pay $.10, we can conclude that the

Accepted Answer

A)   supply of X is highly inelastic.
B)   supply of X is highly elastic.
C)   demand for X is highly inelastic.
D)   demand for X is highly elastic.E) C) and D)
F) A) and D)

Exam 20: Public Finance: Expenditures and Taxes

About two-thirds of all federal spending is for national defense.

Correct AnswerverifiedShow Answer

In general, the buyers will tend to pay a bigger share of a tax on a good when

Correct AnswerverifiedShow Answer

Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1) . If the incidence of the tax is such that the consumers of X pay $1.85 of the tax and the producers pay $0.15, we can conclude that the

Correct AnswerverifiedShow Answer

"Deficit spending" refers to a situation where the government

Correct AnswerverifiedShow Answer

The federal payroll (Social Security) tax

Correct AnswerverifiedShow Answer

The tax rates embodied in the federal personal income tax are such that

Correct AnswerverifiedShow Answer

The largest category of federal government expenditures is national defense.

Correct AnswerverifiedShow Answer

In the U.S., the progressive income-tax system substantially redistributes income.

Correct AnswerverifiedShow Answer

The so-called Tax Freedom Day of each year recognizes the day that

Correct AnswerverifiedShow Answer

The largest portion of federal employees work in the national defense sector.

Correct AnswerverifiedShow Answer

The U.S. federal expenditures for "pensions and income security" are dominated by

Correct AnswerverifiedShow Answer

The basic tax rate on taxable corporate income is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The interest on public debt is more than 10 percent of federal government expenditures.

Correct AnswerverifiedShow Answer

The more inelastic are demand and supply, the

Correct AnswerverifiedShow Answer

Which of the following statements about state lotteries is false?

Correct AnswerverifiedShow Answer

Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1) . If the incidence of the tax is such that the producers of X pay $1.90 of the tax and the consumers pay $.10, we can conclude that the

Correct AnswerverifiedShow Answer

Government purchases of goods and services are

Correct AnswerverifiedShow Answer

In 2013, U.S. governments (local, state, and federal) employed approximately how many million workers?

Correct AnswerverifiedShow Answer

Social Security contributions are part 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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified