If parents die in debt, the children ____ legally obliged to repay the debt so the parents’
debt ___ directly burden the children.
A. are; does
B. are not; does
C. are; does not
D. are not; does not
Answer:
When the inclusion of drugs under Medicare was enacted in 2003, current retirees
experienced _____ because their tax increase was ____ their benefit increase.
A. a net loss; greater than
B. no change; the same as
C. a net gain; less than
D. a net gain; greater than
Answer:
Business income equals sales revenue minus costs. These costs include this year’s
A. purchase of new capital goods.
B. depreciation of new capital goods.
C. depreciation of new and old capital goods.
D. purchase of new and old capital goods.
Answer:
If a tax is levied,
A. emissions are certain but cost is uncertain.
B. cost is certain but emissions are uncertain.
C. emissions and cost are certain.
D. emissions and cost are uncertain.
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. A comparison of the middle and top blocks shows that a switch to a
consumption tax ____ total saving due to the ____.
A. decreases; disincentive effect
B. increases; incentive effect
C. decreases; horizontal redistribution effect
D. increases; horizontal redistribution effect
Answer:
In 2006 economists Stiglitz and Bilmes estimated that the cost of the Iraq intervention
would end up exceeding ___ billion or ___ per person.
A. $2,300; $7,500
B. $4,600; $15,000
C. $6,900; $22,500
D. $9,200; $30,000
Answer:
State revenue comes mainly from the personal income tax and the ___ tax.
A. property
B. corporate income
C. payroll
D. sales
Answer:
As a result of the corporate income tax, investors in the non-corporate sector receive
___ after-tax return.
A. a higher
B. the same
C. a lower
D. a hidden
Answer:
If there is a positive externality (e.g. medical care), 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:
The real deficit equals the nominal deficit
A. plus the reduction in the real value of the debt due to inflation.
B. minus the reduction in the real value of the debt due to inflation.
C. plus the reduction in the real value of the debt due to recession.
D. minus the reduction in the real value of the debt due to recession.
Answer:
For a family with two children, the EITC phases down to zero when the family’s
income reaches _____.
A. $24,000
B. $32,000
C. $40,000
D. $48,000
Answer:
According to the Actuary of the Social Security Administration, in about 2020 payroll
taxes will ____ scheduled benefits.
A. exceed
B. no longer exceed (will for the first time be less than)
C. for the first time exceed
D. continue to exceed
Answer:
According to economists, which are consumption taxes?
A. A retail sales tax but not a value-added tax
B. A value added tax but not a retail sales tax
C. A retail sales tax and a value-added tax
D. Neither a retail sales tax nor a value-added tax
Answer:
In 2000, Medicare, Medicaid, and Social Security constituted ___ of GDP.
A. 8%
B. 10%
C. 12%
D. 14%
Answer:
Under a defined- ___ plan, a worker is promised a retirement benefit that is linked to
that worker’s wage history.
A. benefit
B. contribution
C. retirement
D. formula
Answer:
If there is no externality, health insurance causes ____ that is measured by the area of a
___.
Answer:
A retail sales tax is ____ with respect to ____.
Answer:
Under an each generation self-sufficient system, r* = ____.
Answer:
When government borrows, the _____ curve for loanable funds shifts ____ and the
interest rate ____.
Answer:
According to the cited study, the fiscal imbalance of Social Security is ____ and of
Medicare is _____.
Answer:
If a firm can build for $100,000 in year 0 without borrowing, and profit would be
$110,000 in year 1, it should do it __.
Answer:
Line #3 in the tax return is ___.
Answer:
If there is a negative externality (e.g. pollution), a corrective ___ is needed.
Answer: