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1 | | The largest component of federal spending is: |
| | A) | national defense |
| | B) | health and education |
| | C) | income security |
| | D) | interest on the public debt |
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2 | | Refer to the following:
(10.0K)
The tax represented in the table above is: |
| | A) | regressive |
| | B) | proportional |
| | C) | progressive |
| | D) | optimal |
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3 | | Considering average state-level spending and revenue: |
| | A) | most spending is for police and fire protection |
| | B) | most spending is for health care and hospital administration |
| | C) | the largest source of revenue is taxes on income |
| | D) | the largest sources of revenue are sales and excise taxes |
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4 | | Refer to the following, in which solid arrows are real flows and broken arrows are monetary flows.
(25.0K)
Flow 3 might represent: |
| | A) | federal government bond purchases |
| | B) | wages paid to chemists at the Environmental Protection Agency |
| | C) | tax refunds from filing federal income taxes |
| | D) | federal disability payments |
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5 | | Suppose that product X is taxed at a constant rate of 10%. However, high-income individuals spend a greater proportion of their income on X than low-income individuals. The tax on product X is: |
| | A) | regressive |
| | B) | proportional |
| | C) | progressive |
| | D) | elastic |
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6 | | Sellers will bear the largest burden of an excise tax if: |
| | A) | both demand and supply are elastic |
| | B) | both demand and supply are inelastic |
| | C) | demand is elastic and supply is inelastic |
| | D) | demand is inelastic and supply is elastic |
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7 | | Which of the following federal taxes is most progressive? |
| | A) | Corporate income tax |
| | B) | Personal income tax |
| | C) | Social security tax |
| | D) | Medicare tax |
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8 | | By law, the payroll tax is levied equally on workers and their employees, each paying 7.65%. In the aggregate, the supply of labor is essentially perfectly inelastic. Combining these two observations, we can conclude that the true burden of the tax: |
| | A) | is equally shared by employers and workers |
| | B) | falls mostly on employers |
| | C) | falls fully on employers |
| | D) | falls fully on workers |
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9 | | If your income increases from $40,000 per year to $41,000 per year and your tax increases from $1000 to $1050, the marginal tax rate is: |
| | A) | $50 |
| | B) | 2.5% |
| | C) | 5% |
| | D) | 10% |
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10 | | The demand for gasoline is more elastic in the long run than the short run. All else equal, this implies that over time, an excise tax on gasoline will: |
| | A) | increasingly be passed onto consumers |
| | B) | increasingly be passed back onto sellers |
| | C) | have a shrinking efficiency loss |
| | D) | generate increasing tax revenues |
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