ECON 1202 Chapter Notes - Chapter 13: Fiscal Policy, Output Gap, Social Insurance
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ECON 1202 Full Course Notes
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Taxable Income Range |
Marginal Tax Rate |
$0 to $10,000 |
12% |
$10,001 to $24,500 |
18% |
$24,501 to $68,000 |
27% |
$68,001 and above |
38% |
The table shows the taxable income range and marginal tax rates for a single taxpayer in Oceania. There are no exemptions or deductions on personal income taxes in Oceania.
1. Refer to Table 20.1. The income tax paid by George, a single taxpayer with an income of $65,000, is
A.$11,100.
B.$14,745.
C.$15,345.
D.$17,550.
2.The table shows the taxable income range and marginal tax rates for a single taxpayer in Oceania. There are no exemptions or deductions on personal income taxes in Oceania.
Refer to Table 20.1. George is a single taxpayer with an income of $65,000. What is George's average tax rate?
A.19.00%
B.22.68%
C.23.61%
D.27%
3.Of the following countries, in which one was the true marginal tax rate faced by the typical worker lowest and the average number of hours worked per week highest from 1993 through 1996?
A.Italy
B.Canada
C.the United States
D.Germany
4.Unlike with Social Security taxes, there is no threshold on earnings beyond which the Medicare tax collection stops.
False
True
5.Which of the following expenditures is classified as a discretionary expenditure of the U.S. federalâ government?
A.food stamps
B.Social Security
C.federal employee pensions
D.student loans and grants
6.For the U.S. federal government, mandatory spending refers to
A.spending that is not subject to Congress's annual appropriations process.
B.spending on federal employee salaries.
C.spending that never changes in amount from year to year.
D.spending that must be authorized by Congress each year.
7.Based on the current state of revenue of the Social Security and Medicare programs, the government has two options for funding, which are
A.cutting payroll taxes or raising benefits.
B.cutting payroll taxes or cutting benefits.
C.raising payroll taxes or cutting benefits.
D.raising payroll taxes or raising benefits.
8.Which of the following would be classified as fiscal policy?
A.The Environmental Protection Agency enacts stricter air pollution regulations.
B.The Federal Reserve cuts interest rates to stimulate the economy.
C.The federal government cuts taxes to stimulate the economy.
D.States increase taxes to fund education.
9.Automatic stabilizers refer to
A.the money supply and interest rates that automatically increase or decrease along with the business cycle.
B.changes in the money supply or interest rates that are intended to achieve economic stability.
C.changes in federal taxes and purchases that are intended to influence economic activity.
D.government spending and taxes that automatically increase or decrease along with the business cycle.
10.The implementation lag for fiscal policy ________ it is for monetary policy.
A.can be much longer than
B.is usually the same as
C.is generally much shorter than
D.There is not an implementation lag for fiscal policy.
11.When government decides to increase spending, interest rates generally ________ and this change in interest rates ________ investment spending.
A.decrease; increases
B.increase; decreases
C.decrease; decreases
D.increase; increases
12.The marginal propensity to consume is the proportion of each newâ dollar's worth of income that is spent.
True
False
The poverty threshold for a household with one person in 2010 was:
A. |
about $25,600. |
|
B. |
about $21,100. |
|
C. |
about $11,300. |
|
D. |
about $38,000. |
Compared to a generation ago, public aid programs that are likely to benefit families have received:
A. |
less funding. |
|
B. |
about the same level of funding. |
|
C. |
no funding. |
|
D. |
more funding. |
There is considerable ________ among the quintiles of the distribution of income, with many families moving from ________ and others moving from ________ quintiles.
A. |
immobility; lower to lower; higher to higher |
|
B. |
immobility; lower to higher; higher to lower |
|
C. |
stability; lower to higher; higher to higher |
|
D. |
mobility; higher to lower; lower to higher |
The ________ is widely used to measure income inequality.
A. |
median household income |
|
B. |
ability-to-pay principle |
|
C. |
poverty rate |
|
D. |
Gini coefficient |
Medicaid is funded by:
A. |
private charities. |
|
B. |
federal and state governments. |
|
C. |
state governments only. |
|
D. |
the federal government only. |
Private health insurance is funded by:
A. |
members of a large pool of individuals, each paying a fixed premium to a private company that agrees to pay most of the medical expenses of the members. |
|
B. |
tax contributions to Medicare. |
|
C. |
the government. |
|
D. |
people who are extremely ill who pay very high premiums. |
n the United States, the government pays _______ of all medical costs.
A. |
between 70% and 80% |
|
B. |
approximately 50% |
|
C. |
100% |
|
D. |
less than 20% |
Which of the following programs represents in-kind transfers?
A. |
Medicaid |
|
B. |
Temporary Assistance for Needy Families |
|
C. |
the Earned Income Tax Credit |
|
D. |
Social Security |
Children raised in poverty have a greater likelihood of living in poverty as adults than do those raised in nonpoor families, because low income is highly correlated with higher:
A. |
high school dropout rates. |
|
B. |
high school dropout rates, risk of mental problems and behavioral disorders, and with higher rates of illness and hospitalization. |
|
C. |
risk of mental problems and behavioral disorders. |
|
D. |
rates of illness and hospitalization. |