Econ exam 2

A budget surplus occurs when

tax revenue exceeds government spending

Taxes listed as federal insurance contribution act taxes on the employee paystub are

Payroll taxes

I'm the United States income taxes are

Progressice

__________ is the amount of money a government collects through a tax

tax revenue

In a progressive tax system

the marginal tax rate exceeds the average tax rate

If Kate pays an average tax rate of 12.5% and her total income is $34,000, she pays ________ as tax.

$4,250

What is the budget surplus if the total amount of taxes collected by a local government is $171,000 and the total amount spent is $90,000?

$81,000

T or F: A consumers tastes and preferences determine the satisfaction she receives from consumption

True

T or F: the central as well as the local governments collect taxes in the U.S.

True

A tax collected at each stage of the production process is called a _______ tax

Value added (similar to sales tax)

Joseph earns $75000 monthly. If his average tax rate is 18% what is the total amount of money that he pays as tax ?

$13,500

If the total revenue collected by the federal gov. In a particular year is $1.2 billion and the total amount spent by the gov. During this year is $3.8 billion, what is the budget deficit?

$2.6 million

The government of Lithasia ran a budget deficit of $60,000 in 2012. If the the tax revenue of the Lithuanian Gov in 2012 was $320,000,000 how much did the gov spend in that year?

$320,060,000

Mr.smith pays $20,000 annually as tax. If his annual income is $100,000 what is his average tax?

20%

Over the years, the U.S. government spending has ________.

increased and government revenue has also increased

The largest source of the federal tax revenue is

individual income taxes

In a _____ tax system, the marginal tax rate declines with income

Regressive

Social security taxes in the US tend to be

Regressive

______ taxes are paid by a buyer as a % of the market price of an item

Sales

A payroll tax is also know as a ________ tax. (Tax employers withhold from employees pay)

Social insurance tax

The second largest component of the federal gov revenues is recipes from

Social insurance tax

Which of the following taxes is collected only by federal government ?

Social insurance tax

Which of the following programs provide economic security for the elderly, disabled, widow and fatherless children in the US

Social security

In a proportional tax system,

The average tax rate equals the marginal tax rate

Which of the following is true of individual income taxed

The rate of the income tax imposed by state's in the US varies

Which of the following is collected only by local and state gov?

Toll taxes

In a regressive tax system,

low income households pay a higher percentage of their income as taxes

The marginal income tax rate is the

percentage of the last dollar earned that a household pays in taxes

The contribution of _____ to federal tax receipts is larger than the contribution of ____

personal income taxes; corporate income taxes

The federal government relies on _____ to limit inequality

progressive taxes

One reason governments impose taxes is to ________.

redistribute funds via transfer payments

The government redistributes funds via transfer payments in order to

reduce inequality among the citizens

_______ is generates from taxing profits earned by firms

Corporate income tax

Which of the following is not a direct determining factor of a consumers purchase decisions?

Cost of factor inputs

_______ taxes are taxes paid when purchasing specific food such as alcohol, tabaco, & gasoline

Excise

Which of the following correctly describes incentives?

Incentives are rewards or penalties that motivate people to behave in a particular way.

Which of the following account for the largest portion of state and local gov receipts

Miscellaneous taxes and fees

Which of the following accounts for the largest portion of federal gov spending

National defense

A _____ tax system is one in which tax rates increase with taxable base incomes

Progressive

Local government usually rely on the ____ tax to fund schools, libraries, & public services like police and fire protection

Property

A ______ system is one in which households pay the same % of their incomes in taxes regardless of their income level

Propotional

The state governments in the US spend a larger percentage of their funds on

Public welfare

A consumers budget refers to the

amount of money she can spend on various goods and services

A ___________ occurs when government spending exceeds tax revenue.

budget deficit

A restaurant charges its customers 12% of the total food price as tax. This is an example of a ________ tax.

sales

The average tax rate faced by an individual is the

total tax paid by her divided by the total income earned