Question 1

Tax equity would probably be reduced if federal tax exclusions,such as interest on state and local government securities,were eliminateD.

Accepted Answer

A) True 
 B)False

Question 2

Some of the fears that people have concerning government are well-founded and some are not.

Accepted Answer

A) True 
 B)False

Question 3

Retiring the federal debt will

Accepted Answer

A)  Decrease the supply of government bonds
B)  Increase government bond prices
C)  Lower the interest rate on government bonds
D)  Decrease the demand for money
E)  Do all of the above

Question 4

Assuming negative externalities in production,the type of government action that could bring about an efficient level of production would be

Accepted Answer

A)  A tax levied on each unit produced equal to marginal external costs
B)  A tax levied on each unit produced greater than marginal external costs
C)  A subsidy to consumers equal to marginal external benefits
D)  A subsidy to consumers greater than marginal external benefits
E)  None of the above

Question 5

The Following Questions Refer to the graph below. 2 is levied on this good,how much of the tax will be shifted forward? A) None B) One-fourth C) Half D) All E) It can not be determined" class="answers-bank-image d-inline" rel="preload" >
-Given demand curve D,if an output tax per unit of P- P2 is levied on this good,how much of the tax will be shifted forward?

Accepted Answer

A)  None
B)  One-fourth
C)  Half
D)  All
E)  It can not be determined

Question 6

At the federal level,the largest revenue generating tax is the

Accepted Answer

A)  Corporate income tax
B)  Personal income tax
C)  Property tax
D)  Sales tax
E)  Customs duty

Question 7

The fears of people concerning the size of government are

Accepted Answer

A)  Always without any foundation
B)  Well-founded in some instances and not well-founded in some instances
C)  Difficult to appreciate
D)  Due to low income and low educational levels of many people
E)  Based solely on economic efficiency

Question 8

Before an intelligent decision can be made about whether government is too large or small,the benefits and costs must be weigheD.

Accepted Answer

A) True 
 B)False

Question 9

The Following Questions Refer to the graph below. 2 B) P1 C) P0 D) 0 E) None of the above" class="answers-bank-image d-inline" rel="preload" >
-If external benefits are associated with the consumption of the good,consumers could be induced to purchase the efficient quantity if the price were set at

Accepted Answer

A)  P2
B)  P1
C)  P0
D)  0
E)  None of the above

Question 10

The Following Questions Refer to the graph below.
 
-The demand curve for this product can be described as

Accepted Answer

A)  Perfectly elastic
B)  Perfectly inelastic
C)  Unitary elastic
D)  Hyper elastic
E)  Price elastic

Question 11

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

Accepted Answer

A)  Greater than the benefit of the last dollar spent in the private sector
B)  Less than the benefit of the last dollar spent in the private sector
C)  Equal to the benefit of the last dollar spent in the private sector
D)  Paid for out of current tax collections
E)  None of the above

Question 12

The federal tax system is much more progressive than is generally believeD.

Accepted Answer

A) True 
 B)False  False

Question 13

Assuming positive externalities in consumption,the type of government action that could bring about an efficient level of production would be

Accepted Answer

A)  A tax levied on each unit produced equal to marginal external costs
B)  A tax levied on each unit produced greater than marginal external costs
C)  A subsidy on each unit consumed equal to marginal external benefits
D)  A subsidy on each unit consumed greater than marginal external benefits
E)  None of the above

Question 14

Vertical equity implies that

Accepted Answer

A)  People in different states should pay the same taxes
B)  People with comparable incomes should pay the same taxes
C)  People in different economic circumstances should pay different amounts
D)  Taxes should rise as the size of your family increases
E)  Taxes should be based upon how tall the taxpayer is C

Question 15

The Following Questions Refer to the graph below. 
-The demand curve for this product can be described as

Accepted Answer

A)  Perfectly elastic
B)  Perfectly inelastic
C)  Unitary elastic
D)  Hyper elastic
E)  Price elastic B

Question 16

The highest effective federal tax rate in the United States is approximately

Accepted Answer

A)  10%
B)  15%
C)  20%
D)  24%
E)  34%

Question 17

The ability to pay the principle of taxation suggests that people with more income should pay more taxes.This means that

Accepted Answer

A)  Progressive income rates are consistent with the ability to pay principle
B)  Proportional income rates are consistent with the ability to pay principle
C)  Regressive income rates may or may not be consistent with the ability to pay principle depending on the rate of regression
D)  Sales taxes are consistent with the ability to pay principle
E)  None of the above

Question 18

An efficient level of government expenditures is that level where net benefits to society are maximizeD.

Accepted Answer

A) True 
 B)False

Question 19

The gasoline tax is often used to illustrate the benefits received principle of taxation because

Accepted Answer

A)  Everyone benefits from the gasoline tax
B)  Those who pay the tax receive benefits,since the revenues are used for road and highway construction and maintenance
C)  The amount we pay is consistent with our incomes
D)  Everyone knows when they pay the tax
E)  The gasoline tax is a poor example of the benefits received principle

Question 20

The existence of externalities in production or consumption does not negate the possibility that these goods and services can be supplied efficiently in the market.

Accepted Answer

A) True 
 B)False

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

Tax equity would probably be reduced if federal tax exclusions,such as interest on state and local government securities,were eliminateD.

Correct AnswerverifiedShow Answer

Some of the fears that people have concerning government are well-founded and some are not.

Correct AnswerverifiedShow Answer

Retiring the federal debt will

Correct AnswerverifiedShow Answer

Assuming negative externalities in production,the type of government action that could bring about an efficient level of production would be

Correct AnswerverifiedShow Answer

The Following Questions Refer to the graph below. -Given demand curve D,if an output tax per unit of P- P2 is levied on this good,how much of the tax will be shifted forward?

Correct AnswerverifiedShow Answer

At the federal level,the largest revenue generating tax is the

Correct AnswerverifiedShow Answer

The fears of people concerning the size of government are

Correct AnswerverifiedShow Answer

Before an intelligent decision can be made about whether government is too large or small,the benefits and costs must be weigheD.

Correct AnswerverifiedShow Answer

The Following Questions Refer to the graph below. -If external benefits are associated with the consumption of the good,consumers could be induced to purchase the efficient quantity if the price were set at

Correct AnswerverifiedShow Answer

The Following Questions Refer to the graph below. -The demand curve for this product can be described as

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 government purchase is

Correct AnswerverifiedShow Answer

The federal tax system is much more progressive than is generally believeD.

Correct AnswerverifiedFalse

Assuming positive externalities in consumption,the type of government action that could bring about an efficient level of production would be

Correct AnswerverifiedShow Answer

Vertical equity implies that

Correct AnswerverifiedC

The Following Questions Refer to the graph below. -The demand curve for this product can be described as

Correct AnswerverifiedB

The highest effective federal tax rate in the United States is approximately

Correct AnswerverifiedShow Answer

The ability to pay the principle of taxation suggests that people with more income should pay more taxes.This means that

Correct AnswerverifiedShow Answer

An efficient level of government expenditures is that level where net benefits to society are maximizeD.

Correct AnswerverifiedShow Answer

The gasoline tax is often used to illustrate the benefits received principle of taxation because

Correct AnswerverifiedShow Answer

The existence of externalities in production or consumption does not negate the possibility that these goods and services can be supplied efficiently in the market.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The Following Questions Refer to the graph below. -Given demand curve D,if an output tax per unit of P- P₂ is levied on this good,how much of the tax will be shifted forward?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified