Question 1

In the United States,the payroll tax is also called a

Accepted Answer

A) dividend income tax. 
B) social insurance tax. 
C) value added tax. 
D) capital gains tax. 
A) dividend income tax. 
B) social insurance tax. 
C) value added tax. 
D) capital gains tax.

Question 2

Suppose that in 2009 the average citizen's federal tax bill is $5,678,and total federal spending is $5,467 per person.In 2009,the federal government will have

Accepted Answer

A) a budget surplus. 
B) a budget deficit. 
C) horizontal equity. 
D) vertical equity. 
A) a budget surplus. 
B) a budget deficit. 
C) horizontal equity. 
D) vertical equity.

Question 3

In order to determine tax incidence,one must

Accepted Answer

A) consider issues of equity. 
B) also determine the legal liability of the tax. 
C) evaluate where the tax burden eventually falls. 
D) use the "flypaper theory" of taxation. 
A) consider issues of equity. 
B) also determine the legal liability of the tax. 
C) evaluate where the tax burden eventually falls. 
D) use the "flypaper theory" of taxation.

Question 4

According to the benefits principle,it is fair for people to pay taxes based on the benefits they receive from the government.

Accepted Answer

A) True 
 B)False

Question 5

The U.S.tax code gives preferential treatment to investors in municipal bonds.This is an example of

Accepted Answer

A) a tax loophole. 
B) tax evasion. 
C) an administrative burden. 
D) tax enforcement. 
A) a tax loophole. 
B) tax evasion. 
C) an administrative burden. 
D) tax enforcement.

Question 6

If we want to gauge how much the income tax system distorts incentives,we should use the

Accepted Answer

A) average tax rate. 
B) ability-to-pay principle. 
C) total tax revenue collected. 
D) marginal tax rate. 
A) average tax rate. 
B) ability-to-pay principle. 
C) total tax revenue collected. 
D) marginal tax rate.

Question 7

Total taxes paid divided by total income is called the

Accepted Answer

A) lump-sum tax liability. 
B) marginal tax rate. 
C) average tax rate. 
D) average consumption tax liability. 
A) lump-sum tax liability. 
B) marginal tax rate. 
C) average tax rate. 
D) average consumption tax liability.

Question 8

Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

Accepted Answer

A) a progressive tax system 
B) a regressive tax system 
C) a consumption tax 
D) a lump-sum tax 
A) a progressive tax system 
B) a regressive tax system 
C) a consumption tax 
D) a lump-sum tax

Exam 12: The Design of the Tax System

In the United States,the payroll tax is also called a

Suppose that in 2009 the average citizen's federal tax bill is $5,678,and total federal spending is $5,467 per person.In 2009,the federal government will have

In order to determine tax incidence,one must

According to the benefits principle,it is fair for people to pay taxes based on the benefits they receive from the government.

The U.S.tax code gives preferential treatment to investors in municipal bonds.This is an example of

If we want to gauge how much the income tax system distorts incentives,we should use the

Total taxes paid divided by total income is called the

Economist Alan Greenspan discussed the advantages of which kind of tax system,"particularly if one were designing a tax system from scratch"?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Supply, demand, and Government Policies

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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