Question 1

The state and local tax structure is largely progressive.

Accepted Answer

A) True 
 B)False

Question 2

The property tax may be regressive even though wealthy people own much more taxable property than do poor people.This possibility arises because

Accepted Answer

A) marginal and average tax rates on property tend to converge. 
B) wealthy people can evade property taxes, while poor people cannot. 
C) property taxes on rental property and business property are shifted. 
D) statutory property tax rates decline as the value of property rises. 
A) marginal and average tax rates on property tend to converge. 
B) wealthy people can evade property taxes, while poor people cannot. 
C) property taxes on rental property and business property are shifted. 
D) statutory property tax rates decline as the value of property rises.

Question 3

If a tax is progressive, then

Accepted Answer

A) the average and marginal tax rates are always equal. 
B) as the tax base increases, the marginal tax rate declines. 
C) as the tax base rises, the average tax rate is greater than the marginal tax rate. 
D) as the tax base increases, the marginal tax rate is greater than the average tax rate. 
A) the average and marginal tax rates are always equal. 
B) as the tax base increases, the marginal tax rate declines. 
C) as the tax base rises, the average tax rate is greater than the marginal tax rate. 
D) as the tax base increases, the marginal tax rate is greater than the average tax rate.

Question 4

Corporate income taxes contribute more to federal tax revenues than do personal income taxes.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an exhaustive governmental outlay?

Accepted Answer

A) a federal $5,000 subsidy check to an Illinois farmer 
B) a Temporary Assistance to Needy Families payment made by the state of New York 
C) a NASA payment to Boeing Corporation for space hardware 
D) a federal old age insurance payment to a retired coal miner 
A) a federal $5,000 subsidy check to an Illinois farmer 
B) a Temporary Assistance to Needy Families payment made by the state of New York 
C) a NASA payment to Boeing Corporation for space hardware 
D) a federal old age insurance payment to a retired coal miner

Question 6

The efficiency loss of a tax is

Accepted Answer

A) the net value of sacrificed output caused by the tax. 
B) that portion of the tax paid by producers minus the portion paid by consumers. 
C) that portion of the tax paid by consumers minus the portion paid by producers. 
D) the total tax revenue minus the output loss caused by the tax. 
A) the net value of sacrificed output caused by the tax. 
B) that portion of the tax paid by producers minus the portion paid by consumers. 
C) that portion of the tax paid by consumers minus the portion paid by producers. 
D) the total tax revenue minus the output loss caused by the tax.

Question 7

The federal personal income tax

Accepted Answer

A) has a regressive structure. 
B) is actually less progressive than official tax schedules would indicate because of various tax exemptions and deductions. 
C) has become extremely progressive as a result of taxpayers' being pushed into higher tax brackets by higher income levels. 
D) has experienced substantial increases in rates during the past two years. 
A) has a regressive structure. 
B) is actually less progressive than official tax schedules would indicate because of various tax exemptions and deductions. 
C) has become extremely progressive as a result of taxpayers' being pushed into higher tax brackets by higher income levels. 
D) has experienced substantial increases in rates during the past two years.

Question 8

"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. 
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.

Question 9

Which of the following is the most important source of tax revenue for state governments?

Accepted Answer

A) personal income tax 
B) property taxes 
C) sales and excise taxes 
D) corporate income tax 
A) personal income tax 
B) property taxes 
C) sales and excise taxes 
D) corporate income tax

Question 10

Given supply, the more inelastic the demand for a product, the larger the portion of an excise tax that is shifted to consumers.

Accepted Answer

A) True 
 B)False

Exam 20: Public Finance: Expenditures and Taxes

The state and local tax structure is largely progressive.

The property tax may be regressive even though wealthy people own much more taxable property than do poor people.This possibility arises because

If a tax is progressive, then

Corporate income taxes contribute more to federal tax revenues than do personal income taxes.

Which of the following is an exhaustive governmental outlay?

The efficiency loss of a tax is

The federal personal income tax

"Deficit spending" refers to a situation where the government

Which of the following is the most important source of tax revenue for state governments?

Given supply, the more inelastic the demand for a product, the larger the portion of an excise tax that is shifted to consumers.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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