Econ ch 8 test

Which is an example of federal discretionary spending? Social Security defense spending veterans' pensions unemployment insurance

Defense spending

The likelihood that a tax burden, or the incidence of a tax, will fall on a consumer rather than the producer of the taxed good or service goes up if demand is at equilibrium. inelastic. elastic. shifting to the right.

Inelastic

Why does the government collect federal income tax in a "pay-as-you-earn" system? because the government wants tax incentives to change people's behavior because the government needs the money to meet its expenses throughout the year because the government isn't allowed to do any withholding on personal income taxes because many citizens file their tax returns after April 15

because the government needs the money to meet its expenses throughout the year

If the government wanted to encourage people to exercise more, it would most likely impose new taxes on health club fees. eliminate tax credits for health club fees. allow a tax deduction for health club fees. introduce an excise tax on athletic gear

eliminate tax credits for health club fees.

An example of a tax that is designed to affect behavior is a(n) excise tax on harmful substances. sales tax that excludes everyday items. payroll tax on all workers. flat tax that treats all income equally.

excise tax on harmful substances.

What is a person's taxable income? the income subject to the highest tax rate the income subject to the lowest tax rate gross income minus exemptions and deductions all the money a person earns in a given year

gross income minus exemptions and deductions

Compared to the federal government, states have a relatively easy time balancing their budgets because of sales tax revenues. the existence of local governments. their progressive individual income tax rates. having separate operating and capital budgets.

having separate operating and capital budgets.

Which of the following BEST describes the main source of funding for public high schools? mainly by the state government, through sales taxes mainly by the local government, through property taxes mainly by the federal government, through income taxes mainly by a mix of federal and state government taxes

mainly by the local government, through property taxes

Whose retirements are funded by the taxes today's wage earners are now paying into the Social Security system? people who are currently retired people who plan to retire in the next ten years today's wage earners the wage earners of the future

people who are currently retired

Economists generally agree that taxes ought to be simple, efficient, certain, and fair. universal, progressive, fair, and low. simple, proportional, low, and infrequent. high, regressive, simple, and universal.

simple, efficient, certain, and fair.

Which item best defines federal discretionary spending? spending taxpayers don't know about spending on which lawmakers can make choices spending mandated by existing laws spending in amounts that are too small for Congress to note

spending on which lawmakers can make choices

Which idea or concept underlies Social Security, Medicare, and unemployment taxes? establishing a proportional taxation system ensuring that people do not have to save for their retirement correcting inequities in the individual income tax supporting people who have limited ability to support themselves through work

supporting people who have limited ability to support themselves through work

Which of the following items would you expect to find in a state's operating budget as opposed to its capital budget? the major expansion of port facility the construction of a sports stadium the painting of lines on a road the building of a science center

the painting of lines on a road

According to the Constitution, for what purpose can government collect taxes? to pay the nation's debts and provide for its defense and welfare to discourage exports and promote imports to ensure religious freedom for all citizens to establish the nation's gross domestic product

to pay the nation's debts and provide for its defense and welfare

According to the U.S. Constitution, any tax levied by the government must be A. specifically authorized by an amendment. B. progressive or proportional in its structure. C. for the common defense or general welfare. D. levied only on exports and imports.

C. for the common defense or general welfare.

The fact that April 15th is widely known as the date federal income taxes are due illustrates which of the basic qualities taxes should have? efficiency simplicity certainty equity

Certainty

Who bears the greater burden of a tax on a good or service when demand is inelastic? manufacturers consumers sellers the government

Consumers

A governor who hoped to promote a business-friendly atmosphere might submit legislation to increase the minimum wage. decrease funds for public schools. increase the personal property tax. decrease the corporate income tax.

Decrease the corporate income tax

What is the largest estimated source of federal receipts for 2014? the combination of excise, customs, estate, and gift taxes Social Security and Medicare taxes individual income taxes corporate income taxes

Individual income taxes

Suppose that a state operating budget included more spending than revenue. Which of the following is the most likely response? Legislators vote to increase the capital budget. Legislators vote to increase local property taxes. Legislators vote to decrease overall state spending. Legislators agree to run a deficit.

Legislators vote to decrease overall state spending.

Under the U.S. Constitution, the power of government to levy and collect taxes is not addressed. without limits. limited. forbidden.

Limited

How are mandatory funding and discretionary funding different? Mandatory funding is fixed by law and discretionary funding can change. Mandatory funding can change and discretionary funding is fixed by law. Mandatory funding is capped at a set amount and discretionary funding is not. Mandatory funding is not capped at a set amount and discretionary funding is.

Mandatory funding is fixed by law and discretionary funding can change.

What is the tax structure of the federal individual income tax? regressive proportional flat progressive

Progressive

How is a progressive tax different from a regressive tax? Progressive taxes charge people a higher rate as their income increases. Progressive taxes charge people a lower rate as their income increases. Progressive taxes charge everybody the same rate. Progressive taxes charge people based on the benefits they receive

Progressive taxes charge people a higher rate as their income increases.

The main local tax source of funding for public schools is the sales tax. hotel taxes. property taxes. meal taxes.

Property taxes

What is the largest spending category in state budgets nationwide? public education highway construction government administration state police

Public education

In terms of the federal budget, entitlement programs are significant because The benefit qualifications are changed every year. No one in the government keeps track of them. The benefits are fixed by law. The population is getting younger and therefore more needy.

The benefits are fixed by law

Which of the following would be MOST interested in finding out how many rooms there were in a person's house? governor state police officer tax assessor university professor

Tax assessor

Overall, how would you describe the importance of state corporate taxes to state revenues? They are the most important source of revenue. They are a relatively small source of revenue. They are more important than individual income taxes. They are second only to sales taxes in importance.

They are a relatively small source of revenue.

What key issue challenges the largest entitlement programs in the United States? an aging population skyrocketing rates of taxation a shrinking number of beneficiaries lack of public support for aiding retirees

an aging population

Why do we have tariffs today? to protect American farmers and industries from foreign competitors to discourage people from buying harmful products to keep people from avoiding estate taxes by giving away money before they die to encourage energy conservation and other worthwhile activities

to protect American farmers and industries from foreign competitors

What is a progressive tax? when the federal government uses taxpayer money to fund health and retirement benefits when the taxpayer is allowed to make deductions before tax is taken out when the tax rate rises with the amount of taxable income when workers are able to file an "unemployment compensation" claim

when the tax rate rises with the amount of taxable income

Suppose Nicole earns $20,000 per year, Michelle earns $40,000 per year, and Rosa earns $100,000 per year. Under a regressive tax, who would pay a greater percentage of her income in taxes? A. Nicole B. Michelle C. Rosa D. no one

A. Nicole.

About how much of the federal government's discretionary spending currently goes toward defense? about one eighth about one fourth about half about three fourths

About half

What is a federal tax on money inherited from a deceased loved one? an estate tax a gift tax an excise tax a tariff

An estate tax