Question 1

Bond prices and interest rates are inversely relateD.

Accepted Answer

A) True 
 B)False

Question 2

A tax levied on each unit produced will likely be shifted forward and backward depending upon the elasticities of demand and supply.

Accepted Answer

A) True 
 B)False

Question 3

The federal budget has been in deficit each year since the beginning of the 1970s.

Accepted Answer

A) True 
 B)False

Question 4

The federal income tax system results in a mildly progressive tax structurE.

Accepted Answer

A) True 
 B)False

Question 5

The federal government lowered tax rates in

Accepted Answer

A)  1986 and 2001
B)  1986
C)  2001
D)  Neither year
E)  1909 and has raised them ever since

Question 6

The enforcement and collection of the personal income tax is the responsibility of the Internal Revenue ServicE.

Accepted Answer

A) True 
 B)False

Question 7

According to the equimarginal principle,the efficient level of government expenditures occurs when the benefit of the last dollar spent for each purchase is greater than the last dollar of cost.

Accepted Answer

A) True 
 B)False

Question 8

An output tax will be shifted completely forward if demand is price elastiC.

Accepted Answer

A) True 
 B)False

Question 9

Suppose one individual earns $25,000 per year and another individual earns $15,000 per year.If the individual earning $25,000 per year pays $750 more per year in taxes than the person earning $15,000,this is an illustration of

Accepted Answer

A)  The benefits received principle
B)  The ability to pay principle
C)  The equal tax treatment principle
D)  The equitable payment doctrine
E)  None of the above

Question 10

Public goods and services can be supplied in the market because they are easily divisible into small units and can be priced to the individual demander.

Accepted Answer

A) True 
 B)False

Question 11

Where marginal benefits are greater than the marginal costs,government expenditures should

Accepted Answer

A)  Be increased
B)  Remain the same
C)  Be decreased then increased to their original level
D)  Be increased then decreased to their original level
E)  Do none of the above

Question 12

An output tax will be shifted completely

Accepted Answer

A)  Backward if demand is price inelastic
B)  Forward if demand is perfectly price inelastic
C)  Forward if demand is price elastic
D)  Backward,regardless of elasticity
E)  All of the above

Question 13

Public goods and services have characteristics that make them

Accepted Answer

A)  Possible to exclude people from consuming them
B)  Less available for one person when another consumes them
C)  Easy to provide through private markets
D)  All of the above
E)  None of the above

Question 14

Suppose there are two individuals who each earn $25,000 per year.One individual pays $2,500 in taxes and the other pays $2,000.This is a violation of

Accepted Answer

A)  The benefits received principle
B)  The ability to pay principle
C)  Vertical equity
D)  Horizontal equity
E)  None of the above

Question 15

An efficient level of government expenditures is that level at which

Accepted Answer

A)  Marginal benefits exceed marginal costs
B)  Total benefits equal total costs
C)  The net benefits to society are maximized
D)  The total costs are minimized
E)  None of the above

Question 16

There are currently 14 tax brackets ranging from 11% to 50%.

Accepted Answer

A) True 
 B)False

Question 17

Transfer payments are government expenditures for currently produced goods and services.

Accepted Answer

A) True 
 B)False

Question 18

The Following Questions Refer to the graph below.
 1 B) D1 to D C) S to S1 D) S1 to S E) None of the above" class="answers-bank-image d-inline" rel="preload" >
-Which of the following shifts represents the effect of a tax on this good levied independent of output?

Accepted Answer

A)  D to D1
B)  D1 to D
C)  S to S1
D)  S1 to S
E)  None of the above

Question 19

Tax equity means that

Accepted Answer

A)  All people should pay equal taxes
B)  Only the "rich" should pay taxes
C)  People in the same economic circumstances should pay equal taxes,and people in different economic circumstances should pay unequal taxes
D)  The distribution of income after taxes should be equal
E)  None of the above

Question 20

A progressive tax rate means that the ratio of tax collections to income

Accepted Answer

A)  Falls as income rises
B)  Rises as income rises
C)  Remains the same as income rises
D)  Either (a) and (b) 
E)  May fall,rise,or remain the same as income rises

Exam 14: Government Spending,Taxation,and the National Debt: Who Wins and Who Loses

Tax equity means that

Correct AnswerverifiedShow Answer

The federal income tax system results in a mildly progressive tax structurE.

Correct AnswerverifiedShow Answer

A progressive tax rate means that the ratio of tax collections to income

Correct AnswerverifiedShow Answer

Suppose there are two individuals who each earn $25,000 per year.One individual pays $2,500 in taxes and the other pays $2,000.This is a violation of

Correct AnswerverifiedShow Answer

The enforcement and collection of the personal income tax is the responsibility of the Internal Revenue ServicE.

Correct AnswerverifiedShow Answer

Public goods and services can be supplied in the market because they are easily divisible into small units and can be priced to the individual demander.

Correct AnswerverifiedShow Answer

Where marginal benefits are greater than the marginal costs,government expenditures should

Correct AnswerverifiedShow Answer

An output tax will be shifted completely forward if demand is price elastiC.

Correct AnswerverifiedShow Answer

There are currently 14 tax brackets ranging from 11% to 50%.

Correct AnswerverifiedShow Answer

Bond prices and interest rates are inversely relateD.

Correct AnswerverifiedShow Answer

According to the equimarginal principle,the efficient level of government expenditures occurs when the benefit of the last dollar spent for each purchase is greater than the last dollar of cost.

Correct AnswerverifiedShow Answer

Transfer payments are government expenditures for currently produced goods and services.

Correct AnswerverifiedShow Answer

Suppose one individual earns $25,000 per year and another individual earns $15,000 per year.If the individual earning $25,000 per year pays $750 more per year in taxes than the person earning $15,000,this is an illustration of

Correct AnswerverifiedShow Answer

An efficient level of government expenditures is that level at which

Correct AnswerverifiedShow Answer

The federal budget has been in deficit each year since the beginning of the 1970s.

Correct AnswerverifiedShow Answer

A tax levied on each unit produced will likely be shifted forward and backward depending upon the elasticities of demand and supply.

Correct AnswerverifiedShow Answer

The Following Questions Refer to the graph below. -Which of the following shifts represents the effect of a tax on this good levied independent of output?

Correct AnswerverifiedShow Answer

Public goods and services have characteristics that make them

Correct AnswerverifiedShow Answer

The federal government lowered tax rates in

Correct AnswerverifiedShow Answer

An output tax will be shifted completely

Correct AnswerverifiedShow Answer

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