Today, the first word in the name of the U.S. federal welfare program is what?
A. Timely
B. Temporary
C. Active
D. Aid
Answer:
Under the Medicare prescription drug program, the typical patient has a range called the
“___” hole where she gets no assistance; Congress enacted it to _____.
A. empty; hold down Medicare’s cost
B. empty; give patients an incentive to avoid unnecessary drugs
C. doughnut; hold down Medicare’s cost
D. doughnut; give patients an incentive to avoid unnecessary drugs
Answer:
Using diagrams, explain why (A) the efficiency loss from a tax equals (1/2)T(ΔQ);
(B) doubling a tax quadruples the efficiency loss.
Answer:
If a government is unable to make repayments when they come due, it will ____ and
____ will go unpaid.
A. default; creditors
B. default; debtors
C. refault; creditors
D. refault; debtors
Answer:
High-income households’ share of the nation’s after-tax income is _____ their share of
the nation’s pre-tax income.
A. much lower than
B. somewhat lower than
C. roughly the same as
D. somewhat higher than
Answer:
The federal deficit reached a peak of ___ of GDP in the mid-1980s.
A. 4%
B. 6%
C. 8%
D. 10%
Answer:
If the government ____ is $100 billion at the beginning of this year, and this year the
government ___ is $50 billion, then at the beginning of next year the government ___ is
$___ billion.
A. deficit; deficit; deficit; $150
B. debt; deficit; debt; $150
C. debt; deficit; debt; $50
D. deficit; debt; deficit; $150
Answer:
The efficiency loss from a lump-sum tax T equals _____.
A. (1/2)T(ΔQ)
B. (1/2)T2(ΔQ)
C. T(ΔQ)
D. 0
Answer:
A lump-sum tax is a tax where the amount owed ______.
A. varies with the taxpayer’s behavior
B. doesn’t vary with the taxpayer’s behavior
C. is paid all at once
D. is lumped ÂÂÂÂtogether
Answer:
A tax on high-skilled labor ____ the wage of low-skilled labor because the tax indirectly
causes the low-skilled labor demand curve to shift ____.
A. increases; up
B. increases; down
C. decreases; up
D. decreases; down
Answer:
_____ refers to the assignment of programs and taxes to particular levels of government
to best promote the well being of the citizenry.
A. The Tiebout process
B. The separation process
C. Federalism
D. Optimal federalism
Answer:
Your employer pays you $1,000. The income tax rate is 15%. The interest rate is 4%.
Refer to Table 9.2. Your retirement consumption under the C Tax (Regular IRA) is
____.
1. $850
2. $878.90
3. $884
4. $1,000
Answer:
The consumption tax rate is set so that it raises the same total revenue from the two
persons as the 15% income tax ($30,000).
Refer to Table 9.1. In the middle block, total saving is _______.
A. $70,000
B. $85,000
C. $100,000
D. $110,000
Answer:
The federal government can generate inflation if it keeps its spending ___ than its tax
revenue by ______.
A. less; discipline
B. greater; borrowing from the public
C. greater; printing money
D. greater; borrowing from foreigners
Answer:
The assessment ratio is the ratio of _____.
A. market value to income
B. assessed value to income
C. market value to assessed value
D. assessed value to market value
Answer:
A government that borrows must rely on _____ who will exact a price’”_____
payments’” for their service.
A. debtors; interest
B. creditors; interest
C. debtors; principal
D. creditors: principal
Answer:
Advocates of government insurance make which of these arguments:
(1) it would cover everyone regardless of income, health, or employment.
(2) it would give government leverage to hold down prices charged by providers.
A. Just (1)
B. Just (2)
C. Both (1) and (2)
D. Neither (1) nor (2)
Answer:
Under an each individual self-sufficient system, r* will, on average, equal ____ and will
vary ____ across individuals.
A. mpk; a little
B. gL + gW + gLgW; a little
C. mpk; a lot
D. gL + gW + gLgW; a lot
Answer:
With no policy, each firm emits 120 tons of carbon. As H reduces its emissions from
120 to 0, its marginal abatement cost (MAC) rises from $0 to $480; as L reduces its
emissions from 120 to 0, its MAC rises from $0 to $120. The MD of a ton of carbon is
$96. The tax per ton is T.
Refer to Figure 2.2. Instead, suppose L cuts back 120 and H cuts back 0; the total cost
would be _______.
A. $7,200
B. $11,520
C. $14,400
D. $28,800
Answer:
By the end of World War II, U.S. federal debt was over ___ of GDP.
A. 25%
B. 35%
C. 50%
D. 100%
Answer:
With majority voting, the outcome will be what the voter prefers.
Answer:
Under a credit-invoice method, the firm calculates its VAT by what formula?
Answer:
What must government provide to make a free market work?
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*.
Answer:
Some citizens would not contribute voluntarily to finance a good because they are .
Answer:
Answer:
The efficiency loss of a tax $T per unit on a good equals ___ (where Q is quantity).
Answer:
A tax on the consumers of a good shifts ___ the ___ curve.
Answer:
The Welfare Reform Act of 1996 converted the federal _____ grant to a _____ grant.
Answer:
If all government assistance were counted, the poverty rate would be about ___ of the
official poverty rate (____% instead of ____%).
Answer: