Question 1

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.E) None of the above
F) B) and C)

Question 2

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (8) might represent

Accepted Answer

A)  personal income taxes.
B)  automobile purchases by the state of Maine.
C)  the services of firefighters.
D)  subsidies to farmers.E) A) and D)
F) None of the above

Question 3

The more inelastic are demand and supply, the

Accepted Answer

A)  larger is the efficiency loss of an excise tax.
B)  smaller is the efficiency loss of an excise tax.
C)  higher is the proportion of an excise tax paid by consumers.
D)  smaller is the proportion of an excise tax paid by producers.E) B) and C)
F) All of the above

Question 4

Corporate income taxes contribute more to federal tax revenues than do personal income taxes.

Accepted Answer

A) True 
 B)False

Question 5

The graph shows the supply curve for a product before tax ( S ₀ ) and after an excise tax is imposed ( S ₁) . If 500 units of the product are sold after the tax is imposed, the amount of the tax borne by the consumer is

Accepted Answer

A)  $125.
B)  $250.
C)  $375.
D)  $500.E) A) and B)
F) B) and C)

Question 6

If everyone pays a fixed dollar amount of tax, then the tax is a

Accepted Answer

A)  proportional tax.
B)  regressive tax.
C)  personal tax.
D)  marginal tax.E) A) and D)
F) A) and B)

Question 7

A nation's "tax burden" is measured by the

Accepted Answer

A)  total amount of tax dollars paid by the citizens.
B)  average tax rate on taxable income in the nation.
C)  government's tax revenues as a percentage of GDP.
D)  average of personal-income and corporate-income tax rates.E) B) and C)
F) A) and C)

Question 8

(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 2 + 0.4 Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 3 + 0.4 Q. The efficiency loss of this tax is

Accepted Answer

A)  $62.5.
B)  $125.
C)  $87.5.
D)  $1.E) None of the above
F) B) and D)

Question 9

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Accepted Answer

A) True 
 B)False

Question 10

What are the problems encountered in a strict application of the benefits-received principle of taxation?

Accepted Answer

The benefits-received principle asserts ...

Question 11

From 1960 to 2018, as percentages of U.S. output, government purchases have

Accepted Answer

A)  declined, but transfer payments have increased significantly.
B)  remained about the same, while transfer payments have increased slightly.
C)  increased sharply, but transfer payments have also decreased significantly.
D)  increased slightly, while transfer payments have remained about the same.E) A) and B)
F) None of the above

Question 12

In 2017, based on data from the OECD, the government's total tax revenue as a percentage of total output was highest in which of the following nations?

Accepted Answer

A)  Germany
B)  France
C)  United States
D)  MexicoE) C) and D)
F) B) and C)

Question 13

Sales and excise taxes are levied on retailers, but retailers add these taxes to the prices of their products. This illustrates the

Accepted Answer

A)  equal sacrifice theory of taxation.
B)  shifting of taxes to consumers.
C)  ability-to-pay principle of taxation.
D)  benefits-received principle of taxation.E) B) and C)
F) A) and D)

Question 14

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a regressive tax schedule throughout?

Accepted Answer

A)  A
B)  B
C)  C
D)  none of the schedulesE) A) and D)
F) B) and C)

Question 15

What is a regressive tax? Explain why payroll taxes are regressive.

Accepted Answer

A regressive tax is a tax whose average ...

Question 16

A tax that takes a larger proportion of income from low-income groups than from high-income groups is a

Accepted Answer

A)  stabilizing tax.
B)  regressive tax.
C)  progressive tax.
D)  proportional tax.E) A) and B)
F) All of the above

Question 17

Compare the progressivity of the U.S. tax system to that of other OECD countries.

Accepted Answer

A study by the Organization for Economic...

Question 18

If you pay a $2,000 tax on $10,000 of taxable income and a $4,000 tax on a taxable income of $16,000, the tax is progressive.

Accepted Answer

A) True 
 B)False

Question 19

If each taxpayer paid the same lump-sum amount regardless of income level, the tax system would be

Accepted Answer

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

Question 20

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.E) A) and D)
F) None of the above

Exam 20: Public Finance: Expenditures and Taxes

If you pay a $2,000 tax on $10,000 of taxable income and a $4,000 tax on a taxable income of $16,000, the tax is progressive.

Correct Answer
verified

In 2017, based on data from the OECD, the government's total tax revenue as a percentage of total output was highest in which of the following nations?

Correct Answer
verified

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (8) might represent

Correct Answer
verified

If each taxpayer paid the same lump-sum amount regardless of income level, the tax system would be

Correct Answer
verified

The graph shows the supply curve for a product before tax ( S ₀ ) and after an excise tax is imposed ( S ₁) . If 500 units of the product are sold after the tax is imposed, the amount of the tax borne by the consumer is

Correct Answer
verified

What is a regressive tax? Explain why payroll taxes are regressive.

Correct Answer
verified
A regressive tax is a tax whose average ...
View Answer

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a regressive tax schedule throughout?

Correct Answer
verified

Correct Answer
verified

If everyone pays a fixed dollar amount of tax, then the tax is a

Correct Answer
verified

A tax that takes a larger proportion of income from low-income groups than from high-income groups is a

Correct Answer
verified

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

Correct Answer
verified

Sales and excise taxes are levied on retailers, but retailers add these taxes to the prices of their products. This illustrates the

Correct Answer
verified

Government purchases and transfer payments

Correct Answer
verified

Compare the progressivity of the U.S. tax system to that of other OECD countries.

Correct Answer
verified
A study by the Organization for Economic...
View Answer

From 1960 to 2018, as percentages of U.S. output, government purchases have

Correct Answer
verified

A nation's "tax burden" is measured by the

Correct Answer
verified

The more inelastic are demand and supply, the

Correct Answer
verified

What are the problems encountered in a strict application of the benefits-received principle of taxation?

Correct Answer
verified
The benefits-received principle asserts ...
View Answer

Corporate income taxes contribute more to federal tax revenues than do personal income taxes.

Correct Answer
verified

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Correct Answer
verified

Exam 20: Public Finance: Expenditures and Taxes

If you pay a $2,000 tax on $10,000 of taxable income and a $4,000 tax on a taxable income of $16,000, the tax is progressive.

Correct AnswerverifiedShow Answer

In 2017, based on data from the OECD, the government's total tax revenue as a percentage of total output was highest in which of the following nations?

Correct AnswerverifiedShow Answer

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (8) might represent

Correct AnswerverifiedShow Answer

If each taxpayer paid the same lump-sum amount regardless of income level, the tax system would be

Correct AnswerverifiedShow Answer

The graph shows the supply curve for a product before tax ( S ₀ ) and after an excise tax is imposed ( S ₁) . If 500 units of the product are sold after the tax is imposed, the amount of the tax borne by the consumer is

Correct AnswerverifiedShow Answer

What is a regressive tax? Explain why payroll taxes are regressive.

Correct AnswerverifiedA regressive tax is a tax whose average ...View AnswerShow Answer

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a regressive tax schedule throughout?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If everyone pays a fixed dollar amount of tax, then the tax is a

Correct AnswerverifiedShow Answer

A tax that takes a larger proportion of income from low-income groups than from high-income groups is a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Sales and excise taxes are levied on retailers, but retailers add these taxes to the prices of their products. This illustrates the

Correct AnswerverifiedShow Answer

Government purchases and transfer payments

Correct AnswerverifiedShow Answer

Compare the progressivity of the U.S. tax system to that of other OECD countries.

Correct AnswerverifiedA study by the Organization for Economic...View AnswerShow Answer

From 1960 to 2018, as percentages of U.S. output, government purchases have

Correct AnswerverifiedShow Answer

A nation's "tax burden" is measured by the

Correct AnswerverifiedShow Answer

The more inelastic are demand and supply, the

Correct AnswerverifiedShow Answer

What are the problems encountered in a strict application of the benefits-received principle of taxation?

Correct AnswerverifiedThe benefits-received principle asserts ...View AnswerShow Answer

Corporate income taxes contribute more to federal tax revenues than do personal income taxes.

Correct AnswerverifiedShow Answer

The levying of licensing fees for automobiles is an example of taxation based on the ability-to-pay principle.

Correct AnswerverifiedShow Answer

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A regressive tax is a tax whose average ...
View Answer

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Correct Answer
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Correct Answer
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A study by the Organization for Economic...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The benefits-received principle asserts ...
View Answer

Correct Answer
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Correct Answer
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