Question 1

Social Security contributions are

Accepted Answer

A)  a voluntary dollar amount that people contribute towards Social Security.
B)  entirely paid by your employer.
C)  mandatory taxes partially paid out of workers' wages and salaries.
D)  collected only from people earning more than $80,000 a year.E) A) and B)
F) B) and C)

Question 2

Dynamic tax analysis assumes

Accepted Answer

A)  all of the present tax rates will be in place for a minimum of twenty years.
B)  changes in the tax rates have no effect on the tax base.
C)  changes in the tax rates have no effect on tax revenue.
D)  changes in the tax rates will change the tax base.E) B) and C)
F) A) and B)

Question 3

A tax levied on purchases of a particular good or service

Accepted Answer

A)  is illegal because it is discriminatory.
B)  always leads to a reduction in total tax revenues.
C)  always leads to an increase in total tax revenues.
D)  is an excise tax.E) A) and C)
F) B) and D)

Question 4

When a unit tax of $0.50 is levied on a product

Accepted Answer

A)  the entire $0.50 is paid by the consumer.
B)  the entire $0.50 is paid by the producer.
C)  both the consumer and producer pay $0.50 each.
D)  the consumer pays part of the $0.50 and the producer pays the rest.E) All of the above
F) C) and D)

Question 5

-Refer to the above figure.A unit tax has been placed on the good.What is the total amount of the tax?

Accepted Answer

A)  0
B)    P2P _ { 2 }P2​  - P0\mathrm { P } _ { 0 }P0​ 
C)    P2P _ { 2 }P2​  - P1P _ { 1 }P1​ 
D)    P1P _ { 1 }P1​  - P0\mathrm { P } _ { 0 }P0​E) A) and D)
F) B) and C)

Question 6

Which of the following is NOT an important source of revenue for the federal government?

Accepted Answer

A)  individual income taxes
B)  property taxes
C)  social insurance taxes and contributions
D)  corporate income taxesE) A) and B)
F) C) and D)

Question 7

Ultimately,the real burden of paying for Social Security benefits will be paid for by

Accepted Answer

A)  taxes levied on workers.
B)  Social Security trust fund bonds.
C)  new federally issued Treasury bills.
D)  a new tax levied on businesses.E) A) and C)
F) All of the above

Question 8

Imposing a tax on sales of a product

Accepted Answer

A)  shifts the market demand curve for the product.
B)  shifts the market supply curve for the product.
C)  shifts both the market supply and demand curve for the product.
D)  has no effect on either the market demand or the market supply curve for the product.E) A) and B)
F) B) and D)

Question 9

The three possible sources of government funding include

Accepted Answer

A)  explicit fees,taxes,and borrowing.
B)  international income,personal income taxes,and export taxes.
C)  foreign aid,revenues,and implicit fees.
D)  None of the above are correct.E) All of the above
F) A) and C)

Question 10

The Social Security tax is considered to be a

Accepted Answer

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

Question 11

The tax that brings in the most revenue in the United States is the

Accepted Answer

A)  capital gains tax.
B)  corporate income tax.
C)  Social Security tax.
D)  personal income tax.E) B) and D)
F) None of the above

Question 12

-Refer to the above figures.A unit tax of $2 has been levied on a good.Which of the panels depict the effect of the taxes?

Accepted Answer

A)  Panel 1.
B)  Panel 2.
C)  Panel 3.
D)  None of the diagrams reflect the effect of the tax.E) A) and D)
F) A) and C)

Question 13

Static tax analysis assumes

Accepted Answer

A)  all of the present tax rates will be in place for a minimum of twenty years.
B)  changes in the tax rates have no effect on the tax base.
C)  changes in the tax rates have no effect on tax revenue.
D)  changes in the tax rates will change the tax base.E) All of the above
F) A) and D)

Question 14

An excise tax is a tax that is levied on

Accepted Answer

A)  the value of a piece of property.
B)  the purchase of a given good or service.
C)  the value of an estate.
D)  that part of a person's income coming from interest payments.E) None of the above
F) A) and B)

Question 15

How would the market for coffee be affected if the government charged an excise tax of $1.00 on each unit of coffee sold?

Accepted Answer

A)  There would be a shortage of coffee.
B)  The demand for coffee would increase.
C)  The demand for coffee would decrease.
D)  The supply curve would shift up vertically by $1.00.E) C) and D)
F) B) and C)

Question 16

Suppose the tax amount on the first $10,000 income is $0; $2000 on the next $20,000; $4000 on the next $20,000; $6000 on the next $30,000; and 40 percent on any income over $80,000.Family A has income of $30,000 and Family B has income of $80,000.What is the marginal and average tax rate for each family?

Accepted Answer

A)  Family A: marginal-10 percent; average-6.7 percent; Family B: marginal-30 percent; average-15 percent.
B)  Family A: marginal-10 percent; average-20 percent; Family B: marginal-30 percent; average-23 percent.
C)  Family A: marginal-10 percent; average-10 percent; Family B: marginal-40 percent; average-40 percent.
D)  Family A: marginal-10 percent; average-15 percent; Family B: marginal-40 percent; average-20 percent.E) B) and D)
F) A) and B)

Question 17

The value of goods,services,incomes or wealth subject to taxation is

Accepted Answer

A)  the tax base.
B)  a sales tax.
C)  the collected tax revenue.
D)  a unit tax.E) A) and C)
F) None of the above

Question 18

Sales taxes are

Accepted Answer

A)  assessed on the prices paid on a large set of goods and services.
B)  levied on purchases of a particular good or service.
C)  based on each individual taxpayer's income level.
D)  collected only by the U.S.government.E) None of the above
F) B) and D)

Question 19

The fact that every dollar that the government spends or transfers must ultimately be provided by the taxes and user charges it collects plus government borrowing is known as the

Accepted Answer

A)  government balance sheet constraint.
B)  government budget constraint.
C)  tax collection constraint
D)  user charge constraint.E) B) and D)
F) A) and B)

Question 20

The imposition of a new excise tax will

Accepted Answer

A)  increase equilibrium price and increase equilibrium quantity.
B)  increase equilibrium price and decrease equilibrium quantity.
C)  decrease equilibrium price and increase equilibrium quantity.
D)  decrease equilibrium price and decrease equilibrium quantity.E) All of the above
F) A) and C)

Exam 5: Funding the Public Sector

Which of the following is NOT an important source of revenue for the federal government?

Correct Answer
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Static tax analysis assumes

Correct Answer
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Sales taxes are

Correct Answer
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The value of goods,services,incomes or wealth subject to taxation is

Correct Answer
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The three possible sources of government funding include

Correct Answer
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Dynamic tax analysis assumes

Correct Answer
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-Refer to the above figures.A unit tax of $2 has been levied on a good.Which of the panels depict the effect of the taxes?

Correct Answer
verified

An excise tax is a tax that is levied on

Correct Answer
verified

Ultimately,the real burden of paying for Social Security benefits will be paid for by

Correct Answer
verified

How would the market for coffee be affected if the government charged an excise tax of $1.00 on each unit of coffee sold?

Correct Answer
verified

Social Security contributions are

Correct Answer
verified

Correct Answer
verified

Imposing a tax on sales of a product

Correct Answer
verified

Correct Answer
verified

A tax levied on purchases of a particular good or service

Correct Answer
verified

The imposition of a new excise tax will

Correct Answer
verified

The tax that brings in the most revenue in the United States is the

Correct Answer
verified

The fact that every dollar that the government spends or transfers must ultimately be provided by the taxes and user charges it collects plus government borrowing is known as the

Correct Answer
verified

The Social Security tax is considered to be a

Correct Answer
verified

When a unit tax of $0.50 is levied on a product

Correct Answer
verified

Exam 5: Funding the Public Sector

Which of the following is NOT an important source of revenue for the federal government?

Correct AnswerverifiedShow Answer

Static tax analysis assumes

Correct AnswerverifiedShow Answer

Sales taxes are

Correct AnswerverifiedShow Answer

The value of goods,services,incomes or wealth subject to taxation is

Correct AnswerverifiedShow Answer

The three possible sources of government funding include

Correct AnswerverifiedShow Answer

Dynamic tax analysis assumes

Correct AnswerverifiedShow Answer

-Refer to the above figures.A unit tax of $2 has been levied on a good.Which of the panels depict the effect of the taxes?

Correct AnswerverifiedShow Answer

An excise tax is a tax that is levied on

Correct AnswerverifiedShow Answer

Ultimately,the real burden of paying for Social Security benefits will be paid for by

Correct AnswerverifiedShow Answer

How would the market for coffee be affected if the government charged an excise tax of $1.00 on each unit of coffee sold?

Correct AnswerverifiedShow Answer

Social Security contributions are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Imposing a tax on sales of a product

Correct AnswerverifiedShow Answer

-Refer to the above figure.A unit tax has been placed on the good.What is the total amount of the tax?

Correct AnswerverifiedShow Answer

A tax levied on purchases of a particular good or service

Correct AnswerverifiedShow Answer

The imposition of a new excise tax will

Correct AnswerverifiedShow Answer

The tax that brings in the most revenue in the United States is the

Correct AnswerverifiedShow Answer

The fact that every dollar that the government spends or transfers must ultimately be provided by the taxes and user charges it collects plus government borrowing is known as the

Correct AnswerverifiedShow Answer

The Social Security tax is considered to be a

Correct AnswerverifiedShow Answer

When a unit tax of $0.50 is levied on a product

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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