Question 1

A budget deficit occurs when government receipts exceed government spending.

Accepted Answer

A) True 
 B)False

Question 2

Suppose the country of Mankiwland has a new king,King Gregory.For the purpose of efficiency King Gregory's chief economic advisor would encourage him to design his country's tax system to minimize
(i) deadweight losses from taxes.
(ii) administrative burdens from taxes.
(iii) the tax payments themselves.
(iv) government expenditures to correct for market failures.

Accepted Answer

A)   (i)  only
B)   (i)  and (ii)  only
C)   (iii)  and (iv)  only
D)   (i) , (ii) , (iii) , and (iv) E) B) and C)
F) A) and B)

Question 3

Which of the following statements about state income taxes is correct?

Accepted Answer

A)   Some states do not tax income at all.
B)   If states tax income, they must follow federal guidelines for designing the tax structure.
C)   States are not allowed to have a higher marginal tax rate than the federal marginal tax rate.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 4

In the United States,the marginal tax rate on individual federal income tax

Accepted Answer

A)   decreases as income increases.
B)   increases as income increases.
C)   is constant at all income levels.
D)   applies only to payroll taxes.E) All of the above
F) B) and C)

Question 5

Table 12-12
United States Income Tax Rates for a Single Individual, 2009 and 2010.
 
-Refer to Table 12-12.What type of tax structure does the United States have in 2010 for single individuals?

Accepted Answer

A)   A proportional tax structure
B)   A regressive tax structure
C)   A progressive tax structure
D)   A lump-sum tax structureE) A) and B)
F) A) and C)

Question 6

As a nation gets richer,the government typically takes

Accepted Answer

A)   a constant share of income in taxes.
B)   a smaller share of income in taxes.
C)   a larger share of income in taxes.
D)   There is little evidence of a relationship between income and taxes for most countries.E) A) and B)
F) C) and D)

Question 7

Table 12-6
 
-Refer to Table 12-6.What is the marginal tax rate for a person who makes $50,000?

Accepted Answer

A)   25%
B)   28%
C)   40%
D)   60%E) B) and C)
F) None of the above

Question 8

Table 12-11
The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown.
 
-Refer to Table 12-11.Which tax schedules are proportional?

Accepted Answer

A)   Tax Schedule B only
B)   Tax Schedule B and Tax Schedule C
C)   Tax Schedule D only
D)   Tax Schedule A and Tax Schedule BE) A) and B)
F) None of the above

Question 9

A lump sum tax can never have horizontal equity.

Accepted Answer

A) True 
 B)False

Question 10

The U.S.tax code gives preferential treatment to investors in municipal bonds.This is an example of

Accepted Answer

A)   a tax loophole.
B)   tax evasion.
C)   an administrative burden.
D)   tax enforcement.E) B) and D)
F) B) and C)

Question 11

All of the following are transfer payments except

Accepted Answer

A)   Medicaid.
B)   unemployment compensation.
C)   personal income taxes.
D)   Food Stamps.E) B) and C)
F) C) and D)

Question 12

Table 12-12
United States Income Tax Rates for a Single Individual, 2009 and 2010.
 
-Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her marginal tax rate in 2010?

Accepted Answer

A)   15%
B)   27%
C)   30%
D)   35%E) None of the above
F) B) and D)

Question 13

In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Accepted Answer

A)   15%
B)   30%
C)   43%
D)   60%E) B) and C)
F) C) and D)

Question 14

Which of the following countries has the largest tax burden?

Accepted Answer

A)   Brazil
B)   Germany
C)   United States
D)   SwedenE) None of the above
F) A) and C)

Question 15

Table 12-1
 
-Refer to Table 12-1.If Damian has $33,000 in taxable income,his tax liability will be

Accepted Answer

A)   $4,531.
B)   $4,678.
C)   $4,950.
D)   $8,269.E) B) and D)
F) None of the above

Question 16

When taxes are imposed on a commodity,

Accepted Answer

A)   there is never a deadweight loss.
B)   some consumers alter their consumption by not purchasing the taxed commodity.
C)   tax revenue will rise by the amount of the tax multiplied by the before-tax level of consumption.
D)   the taxes do not distort incentives.E) A) and D)
F) B) and D)

Question 17

With a lump-sum tax,

Accepted Answer

A)   the average tax rate for high income taxpayers will be the same as the average tax rate for low income taxpayers.
B)   the average tax rate for high income taxpayers will be lower than the average tax rate for low income taxpayers.
C)   the average tax rate for high income taxpayers will be higher than the average tax rate for high income taxpayers.
D)   Any of the above could be true under a regressive tax system.E) B) and C)
F) A) and D)

Question 18

When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 19

For the 2010 calendar year only,the federal estate tax does not exist.Which of the following is not correct?

Accepted Answer

A)   The one year absence of this tax creates peculiar incentives for people with large estates who are nearing the end of their lives.
B)   Some people created provisions in their health-care proxies allowing for life support to continue until 2010 so the estate beneficiaries would receive a larger bequest.
C)   The estate tax usually applies to about 5,500 taxpayers per year.
D)   Before 2010, the estate tax was approximately 20 percent of the total estate.E) A) and B)
F) A) and C)

Question 20

Why do some policymakers support a consumption tax rather than an earnings tax?

Accepted Answer

A)   The average tax rate would be lower under a consumption tax.
B)   A consumption tax would encourage people to save earned income.
C)   A consumption tax would raise more revenues than an income tax.
D)   The marginal tax rate would be higher under an earnings tax.E) A) and B)
F) A) and C)

Exam 12: The Design of the Tax System.

As a nation gets richer,the government typically takes

Correct Answer
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Table 12-1 -Refer to Table 12-1.If Damian has $33,000 in taxable income,his tax liability will be

Correct Answer
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Table 12-11 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-11.Which tax schedules are proportional?

Correct Answer
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Which of the following statements about state income taxes is correct?

Correct Answer
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A budget deficit occurs when government receipts exceed government spending.

Correct Answer
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Which of the following countries has the largest tax burden?

Correct Answer
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With a lump-sum tax,

Correct Answer
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When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Correct Answer
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Table 12-12 United States Income Tax Rates for a Single Individual, 2009 and 2010. -Refer to Table 12-12.What type of tax structure does the United States have in 2010 for single individuals?

Correct Answer
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In the United States,the marginal tax rate on individual federal income tax

Correct Answer
verified

The U.S.tax code gives preferential treatment to investors in municipal bonds.This is an example of

Correct Answer
verified

Why do some policymakers support a consumption tax rather than an earnings tax?

Correct Answer
verified

All of the following are transfer payments except

Correct Answer
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When taxes are imposed on a commodity,

Correct Answer
verified

Table 12-12 United States Income Tax Rates for a Single Individual, 2009 and 2010. -Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her marginal tax rate in 2010?

Correct Answer
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A lump sum tax can never have horizontal equity.

Correct Answer
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In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Correct Answer
verified

Table 12-6 -Refer to Table 12-6.What is the marginal tax rate for a person who makes $50,000?

Correct Answer
verified

For the 2010 calendar year only,the federal estate tax does not exist.Which of the following is not correct?

Correct Answer
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Correct Answer
verified

Exam 12: The Design of the Tax System.

As a nation gets richer,the government typically takes

Correct AnswerverifiedShow Answer

Table 12-1 -Refer to Table 12-1.If Damian has $33,000 in taxable income,his tax liability will be

Correct AnswerverifiedShow Answer

Table 12-11 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-11.Which tax schedules are proportional?

Correct AnswerverifiedShow Answer

Which of the following statements about state income taxes is correct?

Correct AnswerverifiedShow Answer

A budget deficit occurs when government receipts exceed government spending.

Correct AnswerverifiedShow Answer

Which of the following countries has the largest tax burden?

Correct AnswerverifiedShow Answer

With a lump-sum tax,

Correct AnswerverifiedShow Answer

When the total surplus lost as a result of a tax is less than the amount of tax revenue collected by the government there is a deadweight loss.

Correct AnswerverifiedShow Answer

Table 12-12 United States Income Tax Rates for a Single Individual, 2009 and 2010. -Refer to Table 12-12.What type of tax structure does the United States have in 2010 for single individuals?

Correct AnswerverifiedShow Answer

In the United States,the marginal tax rate on individual federal income tax

Correct AnswerverifiedShow Answer

The U.S.tax code gives preferential treatment to investors in municipal bonds.This is an example of

Correct AnswerverifiedShow Answer

Why do some policymakers support a consumption tax rather than an earnings tax?

Correct AnswerverifiedShow Answer

All of the following are transfer payments except

Correct AnswerverifiedShow Answer

When taxes are imposed on a commodity,

Correct AnswerverifiedShow Answer

Table 12-12 United States Income Tax Rates for a Single Individual, 2009 and 2010. -Refer to Table 12-12.Mia is a single person whose taxable income is $100,000 a year.What is her marginal tax rate in 2010?

Correct AnswerverifiedShow Answer

A lump sum tax can never have horizontal equity.

Correct AnswerverifiedShow Answer

In 2009,approximately what percentage of federal government receipts came from individual income taxes?

Correct AnswerverifiedShow Answer

Table 12-6 -Refer to Table 12-6.What is the marginal tax rate for a person who makes $50,000?

Correct AnswerverifiedShow Answer

For the 2010 calendar year only,the federal estate tax does not exist.Which of the following is not correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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