Question 1

Economists agree that corporations always shift the corporate income tax to consumers by raising product prices.

Accepted Answer

A) True 
 B)False

Question 2

The greater the elasticity of supply of and demand for a good, the

Accepted Answer

A) smaller will be the efficiency loss of an excise tax on the good. 
B) more likely the good will be a public good rather than a private good. 
C) larger will be the efficiency loss of an excise tax on the good. 
D) larger will be the proportion of an excise tax on the good that will be shifted forward to consumers. 
A) smaller will be the efficiency loss of an excise tax on the good. 
B) more likely the good will be a public good rather than a private good. 
C) larger will be the efficiency loss of an excise tax on the good. 
D) larger will be the proportion of an excise tax on the good that will be shifted forward to consumers.

Question 3

If your income increases from $10,000 per year to $14,000 per year and your tax payment increases from $2,000 to $2,840, the marginal tax rate

Accepted Answer

A) is 20 percent. 
B) is 21 percent. 
C) is 25 percent. 
D) cannot be determined from the given data. 
A) is 20 percent. 
B) is 21 percent. 
C) is 25 percent. 
D) cannot be determined from the given data.

Question 4

The fact that high-income earners tend to earn a higher percentage of their incomes from rent and dividends, in contrast to low-income earners, makes the payroll taxes

Accepted Answer

A) more progressive. 
B) proportional. 
C) more regressive. 
D) a flat tax. 
A) more progressive. 
B) proportional. 
C) more regressive. 
D) a flat tax.

Question 5

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

Accepted Answer

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

Question 6

One difference between sales and excise taxes is that

Accepted Answer

A) sales taxes are only applied at the state level, while excise taxes are only applied at the federal level. 
B) excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. 
C) sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis. 
D) excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis. 
A) sales taxes are only applied at the state level, while excise taxes are only applied at the federal level. 
B) excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. 
C) sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis. 
D) excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis.

Question 7

Payroll taxes account for more than one-third of federal tax revenues.

Accepted Answer

A) True 
 B)False

Question 8

Tax incidence may be defined as the

Accepted Answer

A) average tax rate of a given group of taxpayers. 
B) degree to which a tax falls on a particular person or group. 
C) tax burden, or taxes as a percent of GDP. 
D) number and range of goods and services that are taxeD.Topic: Tax Incidence and Efficiency Loss 
A) average tax rate of a given group of taxpayers. 
B) degree to which a tax falls on a particular person or group. 
C) tax burden, or taxes as a percent of GDP. 
D) number and range of goods and services that are taxeD.Topic: Tax Incidence and Efficiency Loss

Question 9

Many states in the U.S.acquire significant amounts of funds from the following, except

Accepted Answer

A) state-run lotteries. 
B) grants from the federal government. 
C) personal income taxes. 
D) property taxes. 
A) state-run lotteries. 
B) grants from the federal government. 
C) personal income taxes. 
D) property taxes.

Question 10

Government purchases and transfer payments

Accepted Answer

A) differ because the latter absorb resources while the former do not. 
B) differ because the former absorb resources while the latter do not. 
C) are alike because both are more inflationary than private spending. 
D) are alike because both absorb resources. 
A) differ because the latter absorb resources while the former do not. 
B) differ because the former absorb resources while the latter do not. 
C) are alike because both are more inflationary than private spending. 
D) are alike because both absorb resources.

Question 11

Most of the state and local government employees are in what area?

Accepted Answer

A) health care 
B) education 
C) administration 
D) highways 
A) health care 
B) education 
C) administration 
D) highways

Question 12

Which generalization is incorrect?

Accepted Answer

A) Given supply, the more elastic the demand for a product, the larger is the portion of an excise tax that is shifted forward to consumers. 
B) Given demand, the more elastic the supply of a product, the larger is the portion of an excise tax that is borne by producers. 
C) Given supply, the more elastic the demand for a product, the larger is the portion of an excise tax that is borne by the sellers. 
D) Given demand, the less elastic the supply of a product, the larger is the portion of an excise tax that is shifted forward to consumers. 
A) Given supply, the more elastic the demand for a product, the larger is the portion of an excise tax that is shifted forward to consumers. 
B) Given demand, the more elastic the supply of a product, the larger is the portion of an excise tax that is borne by producers. 
C) Given supply, the more elastic the demand for a product, the larger is the portion of an excise tax that is borne by the sellers. 
D) Given demand, the less elastic the supply of a product, the larger is the portion of an excise tax that is shifted forward to consumers.

Question 13

The greater the elasticity of demand and supply, the greater is the efficiency loss of a tax.

Accepted Answer

A) True 
 B)False

Question 14

(Consider This) A value-added tax (VAT)

Accepted Answer

A) is another name for a retail sales tax but is otherwise the same. 
B) is like a sales tax but is only imposed on the difference between a firm's sales and its purchases from other firms. 
C) is like an income tax but is only imposed on the difference between a person's income and his or her consumption. 
D) only applies to imported goods. 
A) is another name for a retail sales tax but is otherwise the same. 
B) is like a sales tax but is only imposed on the difference between a firm's sales and its purchases from other firms. 
C) is like an income tax but is only imposed on the difference between a person's income and his or her consumption. 
D) only applies to imported goods.

Question 15

In 2013, U.S.governments (local, state, and federal) employed roughly what percentage of the U.S.labor force?

Accepted Answer

A) 5 percent 
B) 14 percent 
C) 42 percent 
D) 64 percent 
A) 5 percent 
B) 14 percent 
C) 42 percent 
D) 64 percent

Question 16

Given demand, the more inelastic the supply of a product, the larger the portion of an excise tax that is borne by producers.

Accepted Answer

A) True 
 B)False

Question 17

The two largest sources of tax revenue for the U.S.federal government are

Accepted Answer

A) excise taxes and customs duties. 
B) payroll taxes and excise taxes. 
C) personal income taxes and payroll taxes. 
D) personal income taxes and corporate income taxes. 
A) excise taxes and customs duties. 
B) payroll taxes and excise taxes. 
C) personal income taxes and payroll taxes. 
D) personal income taxes and corporate income taxes.

Question 18

(Consider This) Payout rates for state lotteries

Accepted Answer

A) are considerably lower than payout rates from casinos. 
B) are considerably higher than payout rates from casinos. 
C) are roughly equal to the payout rates from casinos. 
D) cannot be compared with casino payout rates because states do not typically disclose their payout rates. 
A) are considerably lower than payout rates from casinos. 
B) are considerably higher than payout rates from casinos. 
C) are roughly equal to the payout rates from casinos. 
D) cannot be compared with casino payout rates because states do not typically disclose their payout rates.

Question 19

In general for an excise tax on a product, given supply, the more elastic is the demand for the product, the larger will be the portion of the tax shouldered by the buyers.

Accepted Answer

A) True 
 B)False

Question 20

One distinction between government purchases and transfer payments is that

Accepted Answer

A) purchase are exhaustive, whereas transfers are nonexhaustive. 
B) purchase are nonexhaustive, whereas transfers are exhaustive. 
C) purchases are part of total government spending, whereas transfers are not. 
D) purchases are not part of total government spending, whereas transfers are. 
A) purchase are exhaustive, whereas transfers are nonexhaustive. 
B) purchase are nonexhaustive, whereas transfers are exhaustive. 
C) purchases are part of total government spending, whereas transfers are not. 
D) purchases are not part of total government spending, whereas transfers are.

Exam 20: Public Finance: Expenditures and Taxes

Economists agree that corporations always shift the corporate income tax to consumers by raising product prices.

The greater the elasticity of supply of and demand for a good, the

If your income increases from $10,000 per year to $14,000 per year and your tax payment increases from $2,000 to $2,840, the marginal tax rate

The fact that high-income earners tend to earn a higher percentage of their incomes from rent and dividends, in contrast to low-income earners, makes the payroll taxes

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

One difference between sales and excise taxes is that

Payroll taxes account for more than one-third of federal tax revenues.

Tax incidence may be defined as the

Many states in the U.S.acquire significant amounts of funds from the following, except

Government purchases and transfer payments

Most of the state and local government employees are in what area?

Which generalization is incorrect?

The greater the elasticity of demand and supply, the greater is the efficiency loss of a tax.

(Consider This) A value-added tax (VAT)

In 2013, U.S.governments (local, state, and federal) employed roughly what percentage of the U.S.labor force?

Given demand, the more inelastic the supply of a product, the larger the portion of an excise tax that is borne by producers.

The two largest sources of tax revenue for the U.S.federal government are

(Consider This) Payout rates for state lotteries

In general for an excise tax on a product, given supply, the more elastic is the demand for the product, the larger will be the portion of the tax shouldered by the buyers.

One distinction between government purchases and transfer payments is that

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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