Question 1

From the viewpoint of the entire economy,the cost of government is

Accepted Answer

A) equal to the amount of taxes collected. 
B) greater than the amount of taxes collected. 
C) less than the amount of taxes collected. 
D) equal to the level of government expenditures. 
A) equal to the amount of taxes collected. 
B) greater than the amount of taxes collected. 
C) less than the amount of taxes collected. 
D) equal to the level of government expenditures.

Question 2

How has the structure of the personal income tax changed and the share of taxes paid by various income groups changed in recent decades?

Accepted Answer

Compared to the 1960s and 1970s,the marg

Question 3

Increased spending on which of the following items is most likely to increase the size of government during the years following 2010?

Accepted Answer

A) education 
B) Social Security and Medicare 
C) agricultural subsidies 
D) transportation (roads and airports) 
A) education 
B) Social Security and Medicare 
C) agricultural subsidies 
D) transportation (roads and airports)

Question 4

How have the size and functions of government in the United States changed during the last century?

Accepted Answer

During the last century,government has b

Question 5

How has the share of the personal income tax paid by the rich (the top 1 percent of earners)and the not-so-well-off (the bottom half of earners)changed during the last four decades?

Accepted Answer

A) The rich now pay a larger share and the not-so-well-off pay a smaller share of the personal income tax. 
B) The rich now pay a smaller share and the not-so-well-off pay a larger share of the personal income tax. 
C) The share of the personal income tax paid by the rich increased between 1960 and 1980,but the share of the revenues collected from the rich has declined sharply since 1980. 
D) The relative shares paid by the rich and the not-so-well-off have been virtually unchanged during the last four decades. 
A) The rich now pay a larger share and the not-so-well-off pay a smaller share of the personal income tax. 
B) The rich now pay a smaller share and the not-so-well-off pay a larger share of the personal income tax. 
C) The share of the personal income tax paid by the rich increased between 1960 and 1980,but the share of the revenues collected from the rich has declined sharply since 1980. 
D) The relative shares paid by the rich and the not-so-well-off have been virtually unchanged during the last four decades.

Question 6

As real incomes grow,what happens to federal tax revenues as a share of the economy?

Accepted Answer

The tax system of the United States is p

Question 7

Economic analysis indicates that growth in the size of government as a share of the economy will

Accepted Answer

A) always reduce economic growth and reduce the living standards of the citizenry. 
B) enhance economic growth and lead to higher income levels as it becomes larger and larger. 
C) initially promote growth as the government focuses on core functions,but deter growth as government becomes larger and larger. 
D) initially reduce economic growth,but eventually government will enhance growth as it becomes larger and larger. 
A) always reduce economic growth and reduce the living standards of the citizenry. 
B) enhance economic growth and lead to higher income levels as it becomes larger and larger. 
C) initially promote growth as the government focuses on core functions,but deter growth as government becomes larger and larger. 
D) initially reduce economic growth,but eventually government will enhance growth as it becomes larger and larger.

Question 8

For the first time in almost a century,

Accepted Answer

A) the rapid growth of federal spending stopped during the 1990s. 
B) the slow growth of federal spending began to increase during the 1990s. 
C) state and local governments spent more than the federal government during the 1990s. 
D) national defense became the largest category of federal spending in the 1990s. 
A) the rapid growth of federal spending stopped during the 1990s. 
B) the slow growth of federal spending began to increase during the 1990s. 
C) state and local governments spent more than the federal government during the 1990s. 
D) national defense became the largest category of federal spending in the 1990s.

Question 9

During the last four decades,defense expenditures have

Accepted Answer

A) accounted for approximately one-half of federal expenditures. 
B) accounted for less than 10 percent of federal expenditures. 
C) been increasing as a share of federal expenditures. 
D) been declining as a share of federal expenditures. 
A) accounted for approximately one-half of federal expenditures. 
B) accounted for less than 10 percent of federal expenditures. 
C) been increasing as a share of federal expenditures. 
D) been declining as a share of federal expenditures.

Question 10

Which of the following provides the bulk of revenue for the federal government?

Accepted Answer

A) corporate income taxes and grants from state and local governments 
B) personal income and payroll taxes 
C) user charges and funds borrowed from the general public 
D) corporate income and sales taxes 
A) corporate income taxes and grants from state and local governments 
B) personal income and payroll taxes 
C) user charges and funds borrowed from the general public 
D) corporate income and sales taxes

Question 11

Because of which provision in the tax code did more than one-third of all taxpayers either have a zero tax liability or actually receive money from the IRS in 2006?

Accepted Answer

A) Earned Income Tax Credit 
B) Standard Deduction 
C) Marginal Tax Rate 
D) Families with Low Income Credit 
A) Earned Income Tax Credit 
B) Standard Deduction 
C) Marginal Tax Rate 
D) Families with Low Income Credit

Question 12

Government expenditures as a percent of GDP in the United States

Accepted Answer

A) are very high in comparison to the rest of the world. 
B) are smaller than for most other high-income industrial countries. 
C) are much smaller today than they were a century ago. 
D) are none of the above. 
A) are very high in comparison to the rest of the world. 
B) are smaller than for most other high-income industrial countries. 
C) are much smaller today than they were a century ago. 
D) are none of the above.

Question 13

The share of Americans who pay no personal income tax

Accepted Answer

A) has been relatively constant at approximately 33 percent throughout 1975-2009. 
B) was relatively constant near 33 percent between 1975 and 2000,but it has increased during the past decade,reaching nearly half of adult Americans in 2009. 
C) was relatively constant near 33 percent between 1975 and 2000,but it has fallen during the past decade,receding to only 18 percent in 2009. 
D) rose steadily from 18 percent in 1975 to nearly 50 percent of adult Americans in 2000,but it receded to less than 40 percent in 2009. 
A) has been relatively constant at approximately 33 percent throughout 1975-2009. 
B) was relatively constant near 33 percent between 1975 and 2000,but it has increased during the past decade,reaching nearly half of adult Americans in 2009. 
C) was relatively constant near 33 percent between 1975 and 2000,but it has fallen during the past decade,receding to only 18 percent in 2009. 
D) rose steadily from 18 percent in 1975 to nearly 50 percent of adult Americans in 2000,but it receded to less than 40 percent in 2009.

Question 14

Based on estimates from the U.S.Treasury Department,the federal tax structure is

Accepted Answer

A) highly regressive. 
B) roughly proportional. 
C) highly progressive. 
D) regressive at lower incomes and progressive at higher incomes. 
A) highly regressive. 
B) roughly proportional. 
C) highly progressive. 
D) regressive at lower incomes and progressive at higher incomes.

Question 15

What percentage of federal spending was financed by borrowing during 2009-2010?

Accepted Answer

A) approximately 10 percent 
B) approximately 20 percent 
C) approximately 40 percent 
D) more than 50 percent 
A) approximately 10 percent 
B) approximately 20 percent 
C) approximately 40 percent 
D) more than 50 percent

Question 16

Among the 23 long-standing members of the Organization for Economic Cooperation and Development (OECD),the highest rates of economic growth during recent decades have been achieved by

Accepted Answer

A) Western European countries. 
B) the countries with the smallest government expenditures as a share of GDP. 
C) the countries with the largest government expenditures as a share of GDP. 
D) the countries with the most rapid growth of government expenditures as a share of GDP. 
A) Western European countries. 
B) the countries with the smallest government expenditures as a share of GDP. 
C) the countries with the largest government expenditures as a share of GDP. 
D) the countries with the most rapid growth of government expenditures as a share of GDP.

Question 17

Compared to 1980,the top marginal federal income tax rate today is

Accepted Answer

A) substantially lower and the rate structure is less progressive than in 1980. 
B) substantially lower and the rate structure is more progressive than in 1980. 
C) substantially higher and the rate structure is less progressive than in 1980. 
D) substantially higher and the rate structure is more progressive than in 1980. 
A) substantially lower and the rate structure is less progressive than in 1980. 
B) substantially lower and the rate structure is more progressive than in 1980. 
C) substantially higher and the rate structure is less progressive than in 1980. 
D) substantially higher and the rate structure is more progressive than in 1980.

Question 18

A tax dollar collected from an individual or a business costs the private economy more than a dollar because

Accepted Answer

A) the administration and enforcement of the tax system is costly. 
B) record keeping and the other elements of compliance cost are sizable. 
C) the taxes will eliminate some productive exchanges (and cause people to undertake some counterproductive activities). 
D) All of the above are correct. 
A) the administration and enforcement of the tax system is costly. 
B) record keeping and the other elements of compliance cost are sizable. 
C) the taxes will eliminate some productive exchanges (and cause people to undertake some counterproductive activities). 
D) All of the above are correct.

Question 19

Economic theory indicates that,the size of government will be

Accepted Answer

A) unrelated to economic growth. 
B) negatively related to economic growth at all possible sizes of government. 
C) positively related to economic growth at all possible sizes of government. 
D) positively related to economic growth at small levels of government but is negatively related to economic growth as government becomes larger and larger. 
A) unrelated to economic growth. 
B) negatively related to economic growth at all possible sizes of government. 
C) positively related to economic growth at all possible sizes of government. 
D) positively related to economic growth at small levels of government but is negatively related to economic growth as government becomes larger and larger.

Question 20

Measured as a share of the economy,government expenditures on ____ have declined during the last four decades.

Accepted Answer

A) health care 
B) national defense 
C) transfer payments 
D) Social Security benefits 
A) health care 
B) national defense 
C) transfer payments 
D) Social Security benefits

Exam 29: Government Spending and Taxation

From the viewpoint of the entire economy,the cost of government is

How has the structure of the personal income tax changed and the share of taxes paid by various income groups changed in recent decades?

Increased spending on which of the following items is most likely to increase the size of government during the years following 2010?

How have the size and functions of government in the United States changed during the last century?

How has the share of the personal income tax paid by the rich (the top 1 percent of earners)and the not-so-well-off (the bottom half of earners)changed during the last four decades?

As real incomes grow,what happens to federal tax revenues as a share of the economy?

Economic analysis indicates that growth in the size of government as a share of the economy will

For the first time in almost a century,

During the last four decades,defense expenditures have

Which of the following provides the bulk of revenue for the federal government?

Because of which provision in the tax code did more than one-third of all taxpayers either have a zero tax liability or actually receive money from the IRS in 2006?

Government expenditures as a percent of GDP in the United States

The share of Americans who pay no personal income tax

Based on estimates from the U.S.Treasury Department,the federal tax structure is

What percentage of federal spending was financed by borrowing during 2009-2010?

Among the 23 long-standing members of the Organization for Economic Cooperation and Development (OECD),the highest rates of economic growth during recent decades have been achieved by

Compared to 1980,the top marginal federal income tax rate today is

A tax dollar collected from an individual or a business costs the private economy more than a dollar because

Economic theory indicates that,the size of government will be

Measured as a share of the economy,government expenditures on ____ have declined during the last four decades.

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Economic Fluctuations, unemployment, and Inflation

Aan Introduction to Basic Macroeconomic Markets

Dynamic Change, economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, output, and Employment

Creating an Environment for Growth and Prosperity

Institutions,policies,and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

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