Question 1

The benefits-received principle of taxation is most evident in:

Accepted Answer

A)   progressive tax rates.
B)   excise taxes on gasoline.
C)   the personal income tax.
D)   the corporate income tax.E) B) and C)
F) C) and D)

Question 2

If a person is taxed $100 on an income of $1,000, taxed $200 on an income of $2,000, and taxed $300 on an income of $3,000, this person is paying a(n) :

Accepted Answer

A)   progressive tax.
B)   proportional tax.
C)   regressive tax.
D)   excise tax.E) A) and B)
F) B) and C)

Question 3

Which of the following statements best describes government expenditure patterns?

Accepted Answer

A)   The government's share of total economic activity has generally decreased since 1950.
B)   Most of the growth in government expenditures as a percentage of GDP is due to rapidly growing federal government transfer programs.
C)   Government expenditure as a share of GDP has fluctuated wildly depending on which political party is in control.
D)   Most of the growth in government expenditures as a percentage of GDP is due to rapidly growing national defense programs.E) None of the above
F) All of the above

Question 4

If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:

Accepted Answer

A)   progressive tax.
B)   poll tax.
C)   proportional tax.
D)   regressive tax.E) None of the above
F) A) and D)

Question 5

Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?

Accepted Answer

A)   income security
B)   national defense
C)   education and health
D)   interest on the national debtE) A) and B)
F) A) and C)

Question 6

Describe the two basic philosophies of taxation fairness.

Accepted Answer

The two basic philosophies of taxation f...

Question 7

Exhibit 16-3 Income for two persons   Name  Income  Meredith $124,000 Hillary $45,000\begin{array} { | l | r | } \hline 	ext { Name } & 	ext { Income } \\hline 	ext { Meredith } & \$ 124,000 \	ext { Hillary } & \$ 45,000 \\hline\end{array} Name  Meredith  Hillary ​ Income $124,000$45,000​​  In Exhibit 16-3, if the income tax system is currently proportional, we know that:

Accepted Answer

A)   Meredith would probably prefer a progressive income tax system while Hillary would probably prefer a regressive income tax system.
B)   Meredith and Hillary would both probably prefer a regressive income tax system.
C)   Meredith and Hillary would both probably prefer a progressive income tax system.
D)   Meredith would probably prefer a regressive income tax system while Hillary would probably prefer a progressive income tax system. E) A) and D)
F) None of the above

Question 8

Describe the major sources of tax revenue and expenditures for the federal government.

Accepted Answer

The major source of tax revenu...

Question 9

Since 1929, total government taxes as a percentage of GDP:

Accepted Answer

A)   climbed from 10 percent to about 30 percent.
B)   remained close to 30 percent.
C)   climbed from 30 percent to about 50 percent.
D)   climbed from 15 percent to about 50 percent.E) All of the above
F) None of the above A

Question 10

Government expenditures as a share of the U.S. economy are:

Accepted Answer

A)   the largest in the world.
B)   the smallest in the world.
C)   smaller than most Western European countries.
D)   larger than Canada, France, and the United Kingdom but slightly smaller than Germany and Italy.E) B) and D)
F) None of the above

Question 11

According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?

Accepted Answer

A)   If the benefits to the narrow interest group are relatively large, they have an incentive to invest a lot of money and effort in lobbying government.
B)   If the costs of this policy are spread out among the general population, and are a very small burden for anyone person, then those paying the costs have little incentive to organize opposition.
C)   The additional rewards of a policy to the general population outweigh the additional costs that are imposed on a narrow interest group.
D)   Politicians follow their own self-interest and seek to maximize their reelection chances rather than promoting the best interests of society.E) A) and B)
F) All of the above

Question 12

People who often create benefits for the minority and impose the cost on the majority are called:

Accepted Answer

A)   fair-interest groups.
B)   encounter groups.
C)   laissez-faire groups.
D)   special-interest groups.E) B) and C)
F) All of the above D

Question 13

A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:

Accepted Answer

A)   proportional tax.
B)   regressive tax.
C)   progressive tax.
D)   sales tax.E) A) and D)
F) A) and C)

Question 14

Which of the following is the largest source of revenue for the federal government?

Accepted Answer

A)   corporate income tax
B)   payroll tax
C)   personal income tax
D)   user chargesE) A) and B)
F) All of the above

Question 15

At the federal level, the single most important tax, accounting for slightly less than half of revenue, is the:

Accepted Answer

A)   corporate income tax.
B)   personal income tax.
C)   sales tax.
D)   property tax.E) A) and C)
F) B) and D)

Question 16

Which of the following countries devote the smallest percentage of its GDP to taxes?

Accepted Answer

A)   Norway
B)   Sweden
C)   France
D)   United StatesE) A) and D)
F) A) and B)

Question 17

Total government spending (federal, state, and local)  sums to approximately:

Accepted Answer

A)   10 percent of the U.S. economy.
B)   20 percent of the U.S. economy.
C)   40 percent of the U.S. economy.
D)   one-half of the U.S. economy.E) A) and D)
F) A) and C)

Question 18

If a person is concerned that an additional $1,000 income will move him/her into a new tax bracket, that person is worried about the:

Accepted Answer

A)   proportional rate.
B)   regressive tax rate.
C)   marginal tax rate.
D)   flat tax rate.E) None of the above
F) A) and C)

Question 19

Measured as a share of the economy, total government expenditures:

Accepted Answer

A)   have been between 10 and 15 percent of the U.S. economy since 1930.
B)   have been between 20 and 25 percent of the U.S. economy since 1930.
C)   rose from less than 10 percent in 1929 to about 35 percent currently.
D)   declined from more than 50 percent in 1929 to approximately 25 percent currently.E) A) and D)
F) A) and C)

Question 20

"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?

Accepted Answer

A)   benefits-received
B)   inexpensive-to-collect
C)   ability-to-pay
D)   fairness of contributionE) C) and D)
F) B) and D) C

Exam 16: The Public Sector

The benefits-received principle of taxation is most evident in:

Correct AnswerverifiedShow Answer

If a person is taxed $100 on an income of $1,000, taxed $200 on an income of $2,000, and taxed $300 on an income of $3,000, this person is paying a(n) :

Correct AnswerverifiedShow Answer

Which of the following statements best describes government expenditure patterns?

Correct AnswerverifiedShow Answer

If a person is taxed $100 on an income of $1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying a:

Correct AnswerverifiedShow Answer

Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?

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Describe the two basic philosophies of taxation fairness.

Correct AnswerverifiedThe two basic philosophies of taxation f...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Describe the major sources of tax revenue and expenditures for the federal government.

Correct AnswerverifiedThe major source of tax revenu...View AnswerShow Answer

Since 1929, total government taxes as a percentage of GDP:

Correct AnswerverifiedA

Government expenditures as a share of the U.S. economy are:

Correct AnswerverifiedShow Answer

According to public choice theory, which of the following is not a likely reason that government policy might benefit only a narrow interest group?

Correct AnswerverifiedShow Answer

People who often create benefits for the minority and impose the cost on the majority are called:

Correct AnswerverifiedD

A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:

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Which of the following is the largest source of revenue for the federal government?

Correct AnswerverifiedShow Answer

At the federal level, the single most important tax, accounting for slightly less than half of revenue, is the:

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Which of the following countries devote the smallest percentage of its GDP to taxes?

Correct AnswerverifiedShow Answer

Total government spending (federal, state, and local) sums to approximately:

Correct AnswerverifiedShow Answer

If a person is concerned that an additional $1,000 income will move him/her into a new tax bracket, that person is worried about the:

Correct AnswerverifiedShow Answer

Measured as a share of the economy, total government expenditures:

Correct AnswerverifiedShow Answer

"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?

Correct AnswerverifiedC

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The two basic philosophies of taxation f...
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The major source of tax revenu...
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A

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D

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C