CH 20 Smartbook
What portion of the U.S. work force worked in government jobs at some level in 2020? Multiple choice question. 26 50 14 3
14
Sales taxes tend to be shifted in their entirety from BLANK1(producers/consumers) to BLANK2(producers/consumers).
BLANK1: producers, sellers, firms, suppliers, or businesses BLANK2: consumers, buyers, or customers
The size, distribution, and impact of taxes on society is called the tax BLANK
BLANK: burden
Four areas of government spending that account for the majority of the government's budget are pensions, health, interest on the public debt, and national BLANK
BLANK: defense or security
Government purchases are BLANK, which means the products purchased directly absorb resources and are part of domestic output.
BLANK: exhaustive
The incidence of the personal income tax generally is on the BLANK because there is little chance for shifting it.
BLANK: individual, household, employee, or worker
A tax is BLANK (one word) if its average rate increases as income increases.
BLANK: progressive
The primary source of revenue for local government is the BLANK tax.
BLANK: property
A government-imposed tax on BLANK is viewed as an increase to the marginal cost of the product.
BLANK: sellers, producers, production, or suppliers
Excise taxes intended to reduce consumption of goods such as cigarettes that are perceived harmful to society are commonly called BLANK taxes.
BLANK: sin
In the short run, the incidence of the corporate income tax falls on the company's BLANK, who bear the burden of the tax through lower dividends or smaller amounts of retained corporate earnings.
BLANK: stockholders, owners, or shareholders
Government BLANK revenues, or transfer of money to government by producers and consumers, creates no loss in societal well-being.
BLANK: tax
The government uses BLANK revenue to provide public goods and services.
BLANK: tax
How did the federal government respond to businesses during the COVID-19 pandemic in 2020? Multiple choice question. By freezing government spending and calling on businesses to support the economy By steeply increasing taxes on businesses to pay for government programs By spending huge amounts of money to bail out struggling businesses By making state and local governments bear the burden of assisting struggling businesses
By spending huge amounts of money to bail out struggling businesses
How are government workers divided between local, state, and federal positions? Multiple choice question. The federal government employs about the same number of people as the combined state and local governments. The federal government employs many times the number of people employed at the combined state and local levels. Similar numbers of people are employed at each of the federal, state, and local government levels. Combined state and local governments employ many times the number of people employed by the federal government.
Combined state and local governments employ many times the number of people employed by the federal government.
The graph represents the market for a product where D1 and S1 show the initial supply and demand curves, and supply shifts to S2 due to a sales tax. The deadweight loss due to the tax is represented by area
EIG.
What happened with the federal budget in 2020? Multiple choice question. Revenues and expenditures both increased by 3 trillion dollars. Expenditures exceeded revenues by over 3 trillion dollars. Expenditures and revenues both equaled 3 trillion dollars. Revenues exceeded expenditures by over 3 trillion dollars.
Expenditures exceeded revenues by over 3 trillion dollars.
True or false: Public goods and services are provided through private expenditures by individuals or corporations.
False Not True BC Reason: Public goods and services are provided by the government through tax revenues.
True or false: Employers shift part of the incidence of the FICA payroll tax onto consumers in the form of higher prices.
Flase Not True BC Reason: Employers shift part of their portion of the FICA tax onto employees in the form of lower wages.
In the circular flow diagram, which of the following represents the net flow of revenues from households and businesses to government? Multiple choice question. Flows 7 and 8 Flows 9 and 10 Flows 5 and 6 Flows 11 and 12
Flows 11 and 12
Joe complains that 32 percent of his income last year went to taxes. He is referring to his Multiple Choice marginal tax rate. average tax rate. progressive tax rate. proportional tax rate.
average tax rate.
The benefits-received principle and the ability-to-pay principle refer to alternative theories of Blank______. Multiple choice question. health care reform legislation criminal justice how to apportion the tax burden immigration policy
how to apportion the tax burden
The degree to which a tax falls on a particular person or group is called the tax
incidence or burden
Taxable IncomeTotal Tax$ 0$ 02,0002004,0006006,0001,2008,0002,00010,0003,000 Refer to the personal income tax schedule given in the table. This tax is such that the after-tax distribution of income will be Multiple Choice less than the before-tax distribution by the same percentage at each income level. distributed in precisely the same way as the before-tax distribution. more equal than the before-tax distribution. less equal than the before-tax distribution.
less than the before-tax distribution by the same percentage at each income level.-WRONG
Part of the employer portion of payroll taxes gets shifted to workers in the form of Blank______. Multiple choice question. licensing fees reduced benefits lower before-tax wages longer work hours
lower before-tax wages
The transfer of money from consumers and producers to government as a result of taxes involves Multiple choice question. a loss of economic surplus. a loss of well-being to society. no loss of well-being to society.
no loss of well-being to society.
The incidence of the Blank______ is on the individual or household. Multiple choice question. corporate income tax payroll tax personal income tax excise tax
personal income tax
During the COVID-19 pandemic in 2020, the largest source of federal revenue was Blank______, which was Blank______. Multiple choice question. corporate income tax; unexpected payroll tax; typical payroll tax; unexpected personal income tax; typical
personal income tax; typical
Because higher-income households pay a slightly higher percentage of their income in taxes than lower-income households, the federal tax system is considered Blank______. Multiple choice question. proportional progressive regressive flat
progressive
Which of the following is not a significant source of revenue for the U.S. federal government? Multiple Choice payroll taxes property taxes corporate income taxes personal income taxes
property taxes
With respect to local finance, Multiple Choice the corporate income tax is the major source of revenue and natural resource development is the major type of expenditure. property taxes are the basic source of revenue and education is the major type of expenditure. death and gift taxes are the major source of revenue and most expenditures are for hospitals and health services. sales and excise taxes are the major source of revenue and highway construction and maintenance is the major type of expenditure.
property taxes are the basic source of revenue and education is the major type of expenditure.
One distinction between government purchases and transfer payments is that Multiple Choice purchases are exhaustive, whereas transfers are nonexhaustive. purchases are part of total government spending, whereas transfers are not. purchases are not part of total government spending, whereas transfers are. purchases are nonexhaustive, whereas transfers are exhaustive.
purchases are part of total government spending, whereas transfers are not.-WRONG
A sin tax is a type of excise tax imposed on goods that are Blank______. Multiple choice question. excessively profitable thought to be harmful to society underproduced or underconsumed imported from other countries
thought to be harmful to society
In 2020, based on data from the OECD, the government's total tax revenue as a percentage of total output was highest in which of the following nations? Multiple Choice Mexico Denmark the United States France
France-WRONG
During what time period does the incidence of the corporate income tax fall mainly on the company's stockholders? Multiple choice question. In the short run Never In the short run and long run equally In the long run
In the short run
Which of the following statements are true of a progressive tax? Multiple select question. It claims a larger absolute or dollar amount as income increases. It claims a smaller absolute or dollar amount as income increases. It claims a larger percentage of one's income as income increases It claims a smaller percentage of one's income as income increases.
It claims a larger absolute or dollar amount as income increases. It claims a larger percentage of one's income as income increases
Which of the following areas are among the four largest categories of federal spending? Multiple select question. Education and research National defense Pensions and income security Interest on the public debt
National defense Pensions and income security Interest on the public debt
For which of the following types of properties are property taxes typically borne by the property owner? Multiple select question. Personal property Owner-occupied residences Land Rental units
Personal property Owner-occupied residences Land
QUIZ
QUIZ
Which of the following types of tax account for more than 10% of local government tax revenues? Multiple select question. Sales and excise taxes Personal income taxes Property taxes Corporate income taxes
Sales and excise taxes Property taxes
Which of the following are the primary sources of revenue for state governments? Multiple select question. Sales taxes Excise taxes Payroll taxes Corporate income taxes
Sales taxes Excise taxes
Which of the following are included in the net tax flows between businesses and the government? Multiple select question. Federal employee salaries Sales taxes Income taxes Low-interest government loans
Sales taxes Income taxes Low-interest government loans
Which of the following are the two basic philosophies regarding how the tax burden should be apportioned? Multiple select question. The willingness-to-give principle The ability-to-pay principle The wants-versus-needs principle The benefits-received principle
The ability-to-pay principle The benefits-received principle
How did COVID-19 spending affect the annual federal budget deficit between 2019 and 2020? Multiple choice question. The deficit was cut in half. The deficit increased tenfold. The deficit disappeared. The deficit tripled.
The deficit tripled.
Select all of the following events that happened as the government dealt with the COVID-19 pandemic in 2020. Multiple select question. Government spending dropped to the lowest level since the Great Depression. The government increased payments to unemployed individuals. The government helped businesses that were not operating pay their employees. All levels of government, especially the federal government, increased their spending to help people. Government spending rose to the highest level since World War II.
The government increased payments to unemployed individuals. The government helped businesses that were not operating pay their employees. All levels of government, especially the federal government, increased their spending to help people. Government spending rose to the highest level since World War II.
n the following figure, what is represented by the area efac? Multiple choice question. The tax borne only by consumers The efficiency loss of the tax The total tax revenue The tax borne only by producers
The total tax revenue
What happened to federal revenues in 2020 during the COVID-19 pandemic? Multiple choice question. They dropped to nearly zero. They remained virtually unchanged. They decreased relative to increases in expenditures. They increased relative to decreases in expenditures.
They remained virtually unchanged.
True or false: In the United States, higher-income groups pay a larger share of their income in taxes than lower-income groups
True Not False BC Reason: The federal tax system in the United States is progressive.
An increase in the marginal cost of a firm's product will result from Multiple choice question. a price support such as a price floor that increases costs of production. an increase in the marginal product of the firm's variable inputs such as labor. a government subsidy to the firm. a decrease in the firm's input prices. a government-imposed tax on the firm.
a government-imposed tax on the firm.
Deficit spending is government spending that is financed by Blank______. Multiple choice question. borrowing issuance of stock gross taxes sale of stocks net taxes
borrowing
Taxes on Blank______ property are typically shifted to someone other than the owner of the property. Multiple choice question. land and owner-occupied business and rental land and business owner-occupied and personal
business and rental
The full burden of a sales tax tends to be borne Blank______. Multiple choice question. equally by producers and consumers by consumers by the poor because it is a regressive tax by producers
by consumers
Government spending that is financed by borrowing is often referred to as Blank______. Multiple choice question. budget spending government expenditures deficit spending public debt spending government purchases federal finance
deficit spending
Which of the following is the largest expenditure item of state governments? Multiple Choice health and hospitals education highways welfare payments
education
In the following figure, which area represents the total revenue generated by a tax? Multiple choice question. efabc abc a efac
efac
Government expenditures on goods that absorb resources and are counted in national output are considered Blank______ expenditures. Multiple choice question. exhaustive nonexempt exempt nonexhaustive
exhaustive
With respect to state finance, for most states Multiple Choice property taxes are the basic source of revenue and education is the major type of expenditure. estate taxes are the major source of revenue and most expenditures are for health services. sales and excise taxes are the major source of revenue and education is the major type of expenditure. the corporate income tax is the major source of revenue and natural resource development is the major type of expenditure.
sales and excise taxes are the major source of revenue and education is the major type of expenditure.
The main difference between sales and excise taxes is that Multiple Choice sales taxes are consumption taxes, while excise taxes are not. sales taxes apply to a wide range of products, while excise taxes apply only to a select group of products. excise taxes are consumption taxes, while sales taxes are not. excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products.
sales taxes apply to a wide range of products, while excise taxes apply only to a select group of products.
Sales and excise taxes are the primary source of revenue for Blank______. Multiple choice question. state governments federal government businesses local governments
state governments
The size, distribution, and impact of taxes on society is referred to as the Blank______. Multiple choice question. apportionment budget constraint tax burden budget deficit
tax burden
Tax incidence refers to Blank______. Multiple choice question. the amount of tax that a person has to pay every year the determination of a tax as progressive, regressive or proportional how often a tax is imposed upon the same individuals in society the degree to which a tax falls on a particular person or group
the degree to which a tax falls on a particular person or group