Question 1

Which of the following would prevent the Tiebout result?

Accepted Answer

A)  rich people paying the same in taxes as poor people 
B)  individuals not being perfectly mobile 
C)  many different communities for individuals to choose from 
D)  variation in public services among communities 
A)  rich people paying the same in taxes as poor people 
B)  individuals not being perfectly mobile 
C)  many different communities for individuals to choose from 
D)  variation in public services among communities

Question 2

In the Tiebout model,public goods are provided __________ at the local level due to the preference revelation device of _________.

Accepted Answer

A)  inefficiently; general elections 
B)  efficiently; recall elections 
C)  inefficiently; mobility 
D)  efficiently; mobility 
A)  inefficiently; general elections 
B)  efficiently; recall elections 
C)  inefficiently; mobility 
D)  efficiently; mobility

Question 3

A state is currently spending $40 million on highway improvements.If the federal government promises to pay the state $1 for every $1 spent by the state on highway improvements,it is offering a __________ grant that _________ increase total state spending on highway improvements.

Accepted Answer

A)  conditional; will 
B)  conditional; will not 
C)  matching; will 
D)  matching; will not 
A)  conditional; will 
B)  conditional; will not 
C)  matching; will 
D)  matching; will not

Question 4

In 2009,which state spent the most per capita on education?

Accepted Answer

A)  Wisconsin 
B)  California 
C)  Alaska 
D)  Florida 
A)  Wisconsin 
B)  California 
C)  Alaska 
D)  Florida

Question 5

The Tiebout model is most likely to apply to:

Accepted Answer

A)  the county government. 
B)  the state government. 
C)  the national government. 
D)  the city government. 
A)  the county government. 
B)  the state government. 
C)  the national government. 
D)  the city government.

Question 6

An implication of the Tiebout model is that comparable houses in a community with a relatively ________ level of taxes,given a level of public goods,will be worth _________.

Accepted Answer

A)  low; less 
B)  high; less 
C)  high; more 
D)  low; nothing 
A)  low; less 
B)  high; less 
C)  high; more 
D)  low; nothing

Question 7

Which of the following is consistent with the assumptions in the Tiebout model?

Accepted Answer

A)  Local governments raise money using property taxes. 
B)  Public parks in one town also benefit neighboring towns. 
C)  Policing in one town does not affect criminal behavior in another town. 
D)  Public services are equivalent in every community. 
A)  Local governments raise money using property taxes. 
B)  Public parks in one town also benefit neighboring towns. 
C)  Policing in one town does not affect criminal behavior in another town. 
D)  Public services are equivalent in every community.

Question 8

A city that is currently spending $1 million on policing receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good,as are other programs paid for by the city.The income effect ___________; the substitution effect ___________.

Accepted Answer

A)  increases spending on non-policing programs; increases spending on policing 
B)  increases spending on non-policing programs; decreases spending on policing 
C)  increases spending on policing; does not affect spending on policing 
D)  does not change spending on policing; increases spending on non-policing programs 
A)  increases spending on non-policing programs; increases spending on policing 
B)  increases spending on non-policing programs; decreases spending on policing 
C)  increases spending on policing; does not affect spending on policing 
D)  does not change spending on policing; increases spending on non-policing programs

Question 9

A major source of tax revenue at the local level is:

Accepted Answer

A)  income taxes. 
B)  property taxes. 
C)  sales taxes. 
D)  capital gains taxes. 
A)  income taxes. 
B)  property taxes. 
C)  sales taxes. 
D)  capital gains taxes.

Question 10

Which of the following is TRUE?

Accepted Answer

A)  Tiebout sorting in California was more effective prior to the passing of Proposition 13. 
B)  Tiebout sorting in California was less effective prior to the passing of Proposition 13. 
C)  Equalizing school spending across districts within a state leads to more Tiebout sorting. 
D)  Tiebout sorting creates equal educational opportunity. 
A)  Tiebout sorting in California was more effective prior to the passing of Proposition 13. 
B)  Tiebout sorting in California was less effective prior to the passing of Proposition 13. 
C)  Equalizing school spending across districts within a state leads to more Tiebout sorting. 
D)  Tiebout sorting creates equal educational opportunity.

Question 11

If government believes that Tiebout sorting is optimal,which of the following is TRUE?

Accepted Answer

A)  School spending should be equalized across districts. 
B)  School spending should not be equalized across districts. 
C)  Local property taxes should not be linked to local education spending. 
D)  Property taxes should be the same in each community. 
A)  School spending should be equalized across districts. 
B)  School spending should not be equalized across districts. 
C)  Local property taxes should not be linked to local education spending. 
D)  Property taxes should be the same in each community.

Question 12

A city is spending $1 million on policing and receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good.The income effect ___________ spending on policing; the substitution effect ___________ spending on policing.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  increases; does not affect 
D)  decreases; increases 
A)  increases; increases 
B)  increases; decreases 
C)  increases; does not affect 
D)  decreases; increases

Question 13

In _____,there has been increased efforts to shift control and financing of public programs to subnational governments.

Accepted Answer

A)  China 
B)  the United Kingdom 
C)  Greece 
D)  South Korea 
A)  China 
B)  the United Kingdom 
C)  Greece 
D)  South Korea

Question 14

Which of the following always has an income effect?

Accepted Answer

A)  matching grants,but not block grants 
B)  block grants,but not matching grants 
C)  conditional block grants,but not block or matching grants 
D)  block grants,matching grants,and conditional grants 
A)  matching grants,but not block grants 
B)  block grants,but not matching grants 
C)  conditional block grants,but not block or matching grants 
D)  block grants,matching grants,and conditional grants

Question 15

Optimal fiscal federalism is the question of:

Accepted Answer

A)  which states perform efficiently and which do not. 
B)  how much interstate redistribution of wealth by the federal government is appropriate. 
C)  how much tax revenue should be collected by the federal government and allocated to the state governments. 
D)  which activities should take place at which level of government. 
A)  which states perform efficiently and which do not. 
B)  how much interstate redistribution of wealth by the federal government is appropriate. 
C)  how much tax revenue should be collected by the federal government and allocated to the state governments. 
D)  which activities should take place at which level of government.

Question 16

Describe the arguments for redistributing funds from high-revenue,high-spending communities to low-revenue,low-spending communities in each of the following situations:
(a)The world operates in a perfect Tiebout fashion.
(b)The world does not operate in a perfect Tiebout fashion

Accepted Answer

(a)In a perfect Tiebout world,there shou

Question 17

Which of the following is a conditional block grant?

Accepted Answer

A)  $4 million to be spent on education 
B)  up to $4 million to be spent as the state sees fit 
C)  $4 million to the state government to be spent on any state program 
D)  a $1 increase in federal grant money for every $1 spent by the state 
A)  $4 million to be spent on education 
B)  up to $4 million to be spent as the state sees fit 
C)  $4 million to the state government to be spent on any state program 
D)  a $1 increase in federal grant money for every $1 spent by the state

Question 18

Suppose two individuals have identical incomes.One of them has a house worth $100,000 and the other has a house worth $200,000.The local government levies a tax of $500 on each of them,as it does on the homes of the rest of its residents.What kind of tax is this?

Accepted Answer

A)  a property tax 
B)  a benefit tax 
C)  an income tax 
D)  a lump-sum tax 
A)  a property tax 
B)  a benefit tax 
C)  an income tax 
D)  a lump-sum tax

Question 19

Which of the following is NOT a fundamental reason for the increase in the share of federal government spending in total government spending?

Accepted Answer

A)  the Sixteenth Amendment to the Constitution,which allowed the federal government to levy income taxes on individual citizens 
B)  New Deal programs of the 1930s in response to the Great Depression 
C)  introduction of large social insurance and welfare programs by the federal government 
D)  increase in the number of programs mandated by the federal government but funded at the state or local level 
A)  the Sixteenth Amendment to the Constitution,which allowed the federal government to levy income taxes on individual citizens 
B)  New Deal programs of the 1930s in response to the Great Depression 
C)  introduction of large social insurance and welfare programs by the federal government 
D)  increase in the number of programs mandated by the federal government but funded at the state or local level

Question 20

On the spending side,which is NOT a large element of state and local spending:

Accepted Answer

A)  health care. 
B)  education. 
C)  Social Security. 
D)  public safety. 
A)  health care. 
B)  education. 
C)  Social Security. 
D)  public safety.

Exam 10: State and Local Government Expenditures

Which of the following would prevent the Tiebout result?

In the Tiebout model,public goods are provided __________ at the local level due to the preference revelation device of _________.

A state is currently spending $40 million on highway improvements.If the federal government promises to pay the state $1 for every $1 spent by the state on highway improvements,it is offering a __________ grant that _________ increase total state spending on highway improvements.

In 2009,which state spent the most per capita on education?

The Tiebout model is most likely to apply to:

An implication of the Tiebout model is that comparable houses in a community with a relatively ________ level of taxes,given a level of public goods,will be worth _________.

Which of the following is consistent with the assumptions in the Tiebout model?

A city that is currently spending $1 million on policing receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good,as are other programs paid for by the city.The income effect ___________; the substitution effect ___________.

A major source of tax revenue at the local level is:

Which of the following is TRUE?

If government believes that Tiebout sorting is optimal,which of the following is TRUE?

A city is spending $1 million on policing and receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good.The income effect ___________ spending on policing; the substitution effect ___________ spending on policing.

In _____,there has been increased efforts to shift control and financing of public programs to subnational governments.

Which of the following always has an income effect?

Optimal fiscal federalism is the question of:

Describe the arguments for redistributing funds from high-revenue,high-spending communities to low-revenue,low-spending communities in each of the following situations: (a)The world operates in a perfect Tiebout fashion. (b)The world does not operate in a perfect Tiebout fashion

Which of the following is a conditional block grant?

Suppose two individuals have identical incomes.One of them has a house worth $100,000 and the other has a house worth $200,000.The local government levies a tax of $500 on each of them,as it does on the homes of the rest of its residents.What kind of tax is this?

Which of the following is NOT a fundamental reason for the increase in the share of federal government spending in total government spending?

On the spending side,which is NOT a large element of state and local spending:

Why Study Public Finance

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The Equity Implications of Taxation- Tax Incidence

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Filters

In the Tiebout model,public goods are provided __ at the local level due to the preference revelation device of _.

A state is currently spending $40 million on highway improvements.If the federal government promises to pay the state $1 for every $1 spent by the state on highway improvements,it is offering a __ grant that _ increase total state spending on highway improvements.

An implication of the Tiebout model is that comparable houses in a community with a relatively level of taxes,given a level of public goods,will be worth _.

A city that is currently spending $1 million on policing receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good,as are other programs paid for by the city.The income effect _; the substitution effect _.

A city is spending $1 million on policing and receives a one-for-one matching grant of up to $2.5 million to spend on policing.Assume policing is a normal good.The income effect _ spending on policing; the substitution effect _ spending on policing.