With federal spending 20% of GDP and borrowing 4% of GDP in the 1980s, for every
$100 the federal government spent, ___ were borrowed and ___ came from tax
revenue.
A. $80; $20
B. $60; $40
C. $40; $60
D. $20; $80
Answer:
To induce unanimous support from voters for the optimal quality Q* of the public
school, the government must charge each voter ____ equal to that voter’s ___ at Q*.
A. an MB; tax price
B. a tax price; MB
C. an MB; tuition
D. a tuition; MB
Answer:
An alternative method of preparing for retirement is each for each generation to be
A. dependent.
B. efficient.
C. self-sufficient.
D. compassionate.
Answer:
A retail sales tax mainly burdens consumers rather than retailers as long as _____.
A. demand is inelastic relative to supply
B. supply is inelastic relative to demand
C. demand and supply are both inelastic
D. demand and supply are both elastic
Answer:
A corporate income tax reduces the after-tax return to capital invested in ___.
A. the non-corporate sector but not the corporate sector
B. the corporate sector but not the non-corporate sector
C. both the corporate sector and the non-corporate sector
D. neither the corporate sector nor the non-corporate sector
Answer:
By the mid 1990s, federal debt had risen to ___ of GDP.
A. 25%
B. 35%
C. 50%
D. 100%
Answer:
Because households differ in income, residential location is influenced by a ____
process that is implemented by ____.
A. Tiebout; taxes
B. separation; taxes
C. Tiebout; zoning
D. separation; zoning
Answer:
After a _____, the government may find it difficult to borrow because ____ will be
wary.
A. default; creditors
B. default; debtors
C. refault; creditors
D. refault; debtors
Answer:
Economists emphasize that charging the same price P to all firms emitting pollutant X
causes a given total reduction in emissions to be achieved _________.
A. fairly
B. unfairly
C. at minimum cost
D. at maximum profit
Answer:
Where tradable permits have been used in Europe or the U.S., most permits have been
A. sold to firms.
B. sold to consumers.
C. given to firms.
D. given to consumers.
Answer:
In contrast to the minimum wage, the EITC _____ the income of employed low-income
workers without ____ employment.
A. raises; decreasing
B. raises; increasing
C. reduces; decreasing
D. reduces; increasing
Answer:
A retail sales tax is ____ with respect to ____.
A. regressive; consumption
B. regressive; income
C. progressive; consumption
D. progressive; income
Answer:
The two most important taxes for states are the ____.
A. property tax and the payroll tax
B. sales tax and the property tax
C. income tax and the sales tax
D. property tax and the income tax
Answer:
For a family with two children, the EITC phase down begins when family income
exceeds ____.
A. $12,000
B. $16,000
C. $20,000
D. $24,000
Answer:
Deficits and inflation ____.
A. always move in the same direction
B. always move in opposite directions
C. sometimes move in the same direction, sometimes in opposite directions
D. are completely unrelated
Answer:
If there is a negative externality (e.g. pollution), then the market produces too ___ of
the good and a corrective ___ is needed to induce the right quantity of the good.
A. little; subsidy
B. little; tax
C. much; subsidy
D. much; tax
Answer:
An argument for Social Security is that some people are unprepared for retirement due
to
A. gambling.
B. spending.
C. vacationing.
D. bad luck.
Answer:
What would be the impact of replacing the income tax with a consumption tax on
saving, efficiency, and distribution of the tax burden?
Answer:
According to the Actuary, after 2040, payroll taxes will be sufficient to fund ___% of
scheduled benefits.
Answer:
For a family with two children, the first $100 of wage income results in an EITC of
___.
Answer:
Local projects funded by federal or state money are sometimes called ___ projects.
Answer:
Assume voters’ defense spending preference is spread out smoothly from 0% to 60% of
the budget. To win the general election, a candidate should favor __.
Answer: