Taxation: Mastery Test

Which statement about progressive taxes is true?

The rate increases as income increases.

How does the rate of a proportional tax change with income?

The rate remains the same, even if income increases or decreases.

Jack has to pay________tax to the government for his house. This type of tax is_________tax.

property a direct

With a _______tax, the tax rate decreases as income increases. __________individuals bear a greater burden with this type of tax.

regressive Lower-income

Which tax is an indirect tax?

sales tax

examples of mandatory spending

1. Nick receives a weekly amount from the government because he became unemployed when his company cut costs by laying off employees. 2. Gloria is a 70-year-old retired woman.She pays her expenses with the income she receives from the government. 3. Jill receives inpatient hospital services even though she cannot afford them.

examples of discretionary spending

1. The federal government purchases new defense equipment. 2. The government is planning to build more highways. 3. The government funds a scientific research project.

The table shows the federal government's budgeted revenue and expenditures from 2001 through 2010. Identify the years in which there was a budget surplus.

2001, 2004, 2007, 2009

The table shows the federal government's budgeted revenue and expenditures from 2001 through 2010. Identify the years in which there was a budget deficit.

2002, 2003, 2005, 2006, 2008, 2010

Cassandra is 80 years old. Last month, she broke her leg while biking with her grandchildren. She was admitted to a hospital for surgery. Which card should she show them to get benefits?

a Medicare insurance card

All of a country's citizens pay the_________an income tax that is 7% of their annual earnings. This tax is_________tax.

government proportional