Question 1

If a government sells debt to help meet its expenditures,then the government has a

Accepted Answer

A)   budget surplus.Other things the same,the surplus rises if government expenditures rise.
B)   budget surplus.Other things the same,the surplus rises if government expenditures fall.
C)   budget deficit.Other things the same,the deficit rises if government expenditures rise.
D)   budget deficit.Other things the same the deficit rises if government expenditures fallE) B) and D)
F) All of the above

Question 2

Table 12-12
United States Income Tax Rates for a Single Individual,2009 and 2010.
 
-Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her average tax rate in 2009?

Accepted Answer

A)   22.3%
B)   25.3%
C)   27.8%
D)   28.4%E) A) and B)
F) A) and C)

Question 3

A budget deficit

Accepted Answer

A)   occurs when government receipts are less than spending.
B)   occurs when government spending is less than receipts.
C)   occurs when government receipts are equal to spending.
D)   is the accumulation of years of government overspending.E) B) and C)
F) A) and B)

Question 4

An advantage of a consumption tax over the present tax system is that a consumption tax

Accepted Answer

A)   raises more revenues.
B)   would save the government millions in administrative costs.
C)   places more of the tax burden on the wealthy.
D)   does not discourage saving.E) B) and C)
F) C) and D)

Question 5

A person's marginal tax rate equals

Accepted Answer

A)   her tax obligation divided by her average tax rate.
B)   the increase in taxes she would pay as a percentage of the rise in her income.
C)   her tax obligation divided by her income.
D)   the increase in taxes if her average tax rate were to rise by 1%.E) All of the above
F) C) and D)

Question 6

Suppose that in 2020 the average citizen's federal tax bill is $9,372,and total federal spending is $10,824 per person.In 2020,the federal government will have

Accepted Answer

A)   a budget surplus.
B)   a budget deficit.
C)   horizontal equity.
D)   vertical equity.E) A) and B)
F) All of the above

Question 7

From 1950 to today,government spending on Social Security,Medicare,and Medicaid as a percentage of GDP has

Accepted Answer

A)   decreased from about ten percent to less than one percent.
B)   increased from less than one percent to about ten percent.
C)   remained constant at less than one percent.
D)   remained constant at about ten percent.E) A) and D)
F) B) and C)

Question 8

The largest category of federal spending is national defense.

Accepted Answer

A) True 
 B)False

Question 9

In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Accepted Answer

A)   15%
B)   30%
C)   43%
D)   60%E) A) and D)
F) A) and C)

Question 10

Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 50 percent on all additional income.If Bert earns $75,000,what is his average tax rate?

Accepted Answer

A)   20 percent
B)   25 percent
C)   30 percent
D)   36.67 percentE) A) and D)
F) B) and C)

Question 11

Suppose an excise tax is imposed on luxury boats and yachts.Economists argue that such a tax

Accepted Answer

A)   is sure to be vertically equitable,since buyers of luxury boats and yachts are wealthy.
B)   entails no deadweight loss as long as buyers of boats and yachts can easily substitute one luxury good for another.
C)   violates the benefits principle of taxation.
D)   may burden workers in the luxury-boat-and-yacht industry more than it burdens the buyers of luxury boats and yachts.E) A) and B)
F) A) and C)

Question 12

In 2009,social insurance taxes represented approximately what percentage of total receipts for the federal government?

Accepted Answer

A)   12%
B)   22%
C)   32%
D)   42%E) A) and D)
F) All of the above

Question 13

If the government imposes a tax of $3,000 on everyone,the tax would be

Accepted Answer

A)   an income tax.
B)   a consumption tax.
C)   a lump-sum tax.
D)   a marginal tax.E) A) and D)
F) B) and C)

Question 14

What are the characteristic(s)of an efficient tax system?

Accepted Answer

One tax system is more efficie...

Question 15

The government taxes corporate income on the basis of

Accepted Answer

A)   profit.
B)   the amount the firm receives for the goods or services it sells.
C)   the number of employees.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 16

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000.What is the marginal tax rate when income is $60,000?

Accepted Answer

A)   10 percent
B)   20 percent
C)   30 percent
D)   50 percentE) A) and C)
F) C) and D)

Question 17

With a lump-sum tax,

Accepted Answer

A)   the average tax rate for high income taxpayers will be the same as the average tax rate for low income taxpayers.
B)   the average tax rate for high income taxpayers will be lower than the average tax rate for low income taxpayers.
C)   the average tax rate for high income taxpayers will be higher than the average tax rate for high income taxpayers.
D)   Any of the above could be true under a regressive tax system.E) B) and C)
F) A) and D)

Question 18

The most efficient tax possible is a

Accepted Answer

A)   lump-sum tax.
B)   marginal tax.
C)   proportional tax.
D)   value-added tax.E) C) and D)
F) A) and D)

Question 19

The largest source of revenue for the federal government is the

Accepted Answer

A)   individual income tax.
B)   property tax.
C)   sales tax.
D)   corporate income tax.E) A) and B)
F) None of the above

Exam 12: The Design of the Tax System

The most efficient tax possible is a

Correct Answer
verified

Suppose an excise tax is imposed on luxury boats and yachts.Economists argue that such a tax

Correct Answer
verified

If a government sells debt to help meet its expenditures,then the government has a

Correct Answer
verified

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000.What is the marginal tax rate when income is $60,000?

Correct Answer
verified

A person's marginal tax rate equals

Correct Answer
verified

An advantage of a consumption tax over the present tax system is that a consumption tax

Correct Answer
verified

In 2009,social insurance taxes represented approximately what percentage of total receipts for the federal government?

Correct Answer
verified

The government taxes corporate income on the basis of

Correct Answer
verified

Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 50 percent on all additional income.If Bert earns $75,000,what is his average tax rate?

Correct Answer
verified

The largest category of federal spending is national defense.

Correct Answer
verified

A budget deficit

Correct Answer
verified

Table 12-12 United States Income Tax Rates for a Single Individual,2009 and 2010. -Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her average tax rate in 2009?

Correct Answer
verified

In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Correct Answer
verified

With a lump-sum tax,

Correct Answer
verified

Suppose that in 2020 the average citizen's federal tax bill is $9,372,and total federal spending is $10,824 per person.In 2020,the federal government will have

Correct Answer
verified

From 1950 to today,government spending on Social Security,Medicare,and Medicaid as a percentage of GDP has

Correct Answer
verified

If the government imposes a tax of $3,000 on everyone,the tax would be

Correct Answer
verified

The largest source of revenue for the federal government is the

Correct Answer
verified

What are the characteristic(s)of an efficient tax system?

Correct Answer
verified
One tax system is more efficie...
View Answer

Exam 12: The Design of the Tax System

The most efficient tax possible is a

Correct AnswerverifiedShow Answer

Suppose an excise tax is imposed on luxury boats and yachts.Economists argue that such a tax

Correct AnswerverifiedShow Answer

If a government sells debt to help meet its expenditures,then the government has a

Correct AnswerverifiedShow Answer

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000.What is the marginal tax rate when income is $60,000?

Correct AnswerverifiedShow Answer

A person's marginal tax rate equals

Correct AnswerverifiedShow Answer

An advantage of a consumption tax over the present tax system is that a consumption tax

Correct AnswerverifiedShow Answer

In 2009,social insurance taxes represented approximately what percentage of total receipts for the federal government?

Correct AnswerverifiedShow Answer

The government taxes corporate income on the basis of

Correct AnswerverifiedShow Answer

Bert faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 50 percent on all additional income.If Bert earns $75,000,what is his average tax rate?

Correct AnswerverifiedShow Answer

The largest category of federal spending is national defense.

Correct AnswerverifiedShow Answer

A budget deficit

Correct AnswerverifiedShow Answer

Table 12-12 United States Income Tax Rates for a Single Individual,2009 and 2010. -Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her average tax rate in 2009?

Correct AnswerverifiedShow Answer

In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Correct AnswerverifiedShow Answer

With a lump-sum tax,

Correct AnswerverifiedShow Answer

Suppose that in 2020 the average citizen's federal tax bill is $9,372,and total federal spending is $10,824 per person.In 2020,the federal government will have

Correct AnswerverifiedShow Answer

From 1950 to today,government spending on Social Security,Medicare,and Medicaid as a percentage of GDP has

Correct AnswerverifiedShow Answer

If the government imposes a tax of $3,000 on everyone,the tax would be

Correct AnswerverifiedShow Answer

The largest source of revenue for the federal government is the

Correct AnswerverifiedShow Answer

What are the characteristic(s)of an efficient tax system?

Correct AnswerverifiedOne tax system is more efficie...View AnswerShow Answer

Correct Answer
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Correct Answer
verified
One tax system is more efficie...
View Answer