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27 Jan 2019

1) Ad valorem taxes

a) are not used in the United States.
b) are based on income levels.
c) are applied only to imports.

d) are assessed as a percentage of a good's price.

2) The incentive structure is a

a) system of checks and balances in the government.
b) system determined by the federal government that gives certain states more federal funds.
c) system of rewards and punishments that individuals consider when making decisions.
d)system of infrastructure in the United States that improves commerce

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29 Jan 2019

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Related questions

Q21. A nation's raw materials and sources of energy are considered part of its capital resources.
a. true
b. false

Q22. Comparative advantage cannot be applied to activities of individuals.
a. true
b. false

Q23. Which of the following is true of scarcity?
a. it applies to raw materials; manufactured goods are not scarce
b. it affects all countries except the United States and Western Europe
c. it is a basic problem of economics that affects all nations
d. it is a basic problem of economics that affects all nations

Q24. The ability to produce a good or service at a lower opportunity cost than other producers face is known as comparative advantage.
a. true
b. false

Q25. Under the U.S. market system, land and capital goods are owned mainly by
a. the federal government
b. individuals and firms
c. local governments
d. state governments

Q26. A major disadvantage of a corporation is
a. its weakness at raising funds
b. its inability to limit the financial liability of the owners
c. the double taxation of its profits
d. its lack of continuity in the event of a stockholder's death

Q27. The major advantage of the sole proprietorship is its
a. ability to raise funds
b. lack of distinction between business and owner
c. provision of continuity in the business in case of death
d. flexible management

Question 32

  1. Tim, a citizen of the United States living in Virginia, buys a computer that was made in South Korea by a Japanese firm. This transaction would affect the GDP of the United States in which way?

    Net exports would decrease and GDP would decrease.

    Net exports would decrease and GDP would be unaffected.

    Net exports would increase and GDP would increase.

    Net exports would increase and consumption would increase.

1 points

Question 33

  1. An increase in U.S. government spending tends to

    increase U.S. interest rates and increase the U.S. capital account surplus.

    increase U.S. interest rates and decrease the U.S. capital account surplus.

    decrease U.S. interest rates and increase the U.S. capital account surplus.

    decrease U.S. interest rates and decrease the U.S. capital account surplus.

1 points

Question 34

  1. A _______ is a system in which the government intervenes extensively in the foreign exchange market to keep the exchange rate within certain bounds.

    dirty float

    floating exchange rate

    fixed exchange rate

    dollarization

1 points

Question 35

  1. Suppose the exchange rate between the euro and the dollar is E0.5 to $1. If a Big Mac costs $3 in the United States and E1.5 in Germany, then the real exchange rate is

    1:1.

    2:1.

    1:2.

    It cannot be determined from this information.

1 points

Question 36

  1. Which of the following prevent the purchasing power parity theorem from holding perfectly?

    transportation costs

    goods that cannot be shipped

    tariffs and quotas

    Each of these answers is correct.

1 points

Question 37

  1. Fiscal policy is more effective in affecting economic activity if

    many resources are unemployed.

    there is a real shock instead of an aggregate demand shock.

    the economy returns to the long-run condition almost immediately.

    there is a long implementation lag.

1 points

Question 38

  1. In a typical year, changes in government spending compared to overall spending are relatively

    small.

    large.

    unpredictable.

    well-timed.

1 points

Question 39

  1. Which statement is TRUE about the difference between monetary and fiscal policy?

    Fiscal policy can quickly adjust to changes in aggregate demand.

    Fiscal policy can have a more direct impact.

    Monetary policy is subject to many long lags.

    Monetary policy can affect the economy regardless of the actions banks take.

1 points

Question 40

  1. Fiscal policies that help an economy in a recession without additional actions by policy makers are called

    consumption smoothers.

    Ricardian equalizers.

    automatic stabilizers.

    Each of these answers is correct.

1 points

Question 41

  1. The U.S. individual income tax system can best be described as a

    regressive tax system.

    flat tax system.

    zero tax system.

    progressive tax system.

1 points

Question 42

  1. What demographic change in the United States will cause government spending to increase in the next 50 years?

    The population over 65 will grow.

    The population will be younger.

    Women will have fewer children.

    Immigration will increase.

1 points

Question 43

  1. What kind of rising costs will mostly cause U.S. government spending to skyrocket in the future?

    defense

    environmental protection

    education

    health care

1 points

Question 47

  1. The Fed could have popped the bubble of the housing boom in the 2000s by

    lending directly to homeowners.

    regulating the stock markets more.

    reducing the growth rate of the money supply.

    doing nothing.

1 points

Question 48

  1. Which of the following would be an example of running monetary policy by rules?

    A 5 percent increase in money supply automatically leads to a 2 percent increase in real GDP.

    An increase in money supply automatically leads to an increase in inflation.

    The Fed will increase money growth to different levels, depending on the severity of the recession.

    A 1 percent drop in real GDP will automatically elicit a 2 percent increase in money supply.

    Question 50

    Moral hazard occurs when

    the failure of one financial institution can bring down other institutions as well.

    financial institutions take on too much risk because they are insured.

    financial institutions become insolvent because they issued too many loans.

    there are more short-term liabilities than short-term assets.

    Which of the following is NOT a transmission mechanism?

    reductions in the money supply

    intertemporal substitution

    uncertainty

    sticky wages and prices

    Question 56

    For a given increase in government spending growth, intertemporal substitution is more widespread when

    the impact of AD growth on both inflation and real GDP growth is stronger.

    the impact of AD growth on both inflation and real GDP growth is weaker.

    the impact of AD growth on inflation is stronger and the impact of the AD growth on real GDP growth is weaker.

    the impact of AD growth on inflation is weaker and the impact of AD growth on real GDP growth is stronger.

    Stalin:

    instituted democratic reforms, leading to widespread prosperity.

    took government control of the farms in Ukraine, leading to the starvation of millions of people.

    increased the provision of public goods, which had a positive effect on lowering the unemployment rate.

    tried unsuccessfully to expand voting rights in 1924 Russia.

    1 points

    Question 60

    1 points

    Question 59

    If voters care about two issues such as taxes and war, then politicians:

    will form a stable policy on these issues.

    can pose a policy that will never lose against another policy.

    must assume that there is no median voter.

    may never converge on a stable outcome.

    1 points

    Question 58

    Policy A adversely affects 50 million people at a cost of $1 per person. But Policy A also benefits 1,000 people at $30,000 per person. Which of the following statements is true?

    Policy A will not become law because it hurts more people than it helps.

    Policy A concentrates all the costs among a small group of people and all the benefits among a large group of people.

    Policy A is likely to be supported by politicians even though it makes society worse off.

    Since Policy A negatively affects many people, and so rational ignorance will not be a problem.

    1 points

    Question 57

    Data for the United States show that the incumbent party tends to win the election if:
    I. personal disposable income is growing.
    II. the inflation rate is low.
    III. the political party has not been in power for too many continuous terms.

    I only

    I and II only

    I and III only

    I, II, and III

    1 points

    Question 53

    1 points

    Question 52

    What is the purpose of the Fed's structure?

    to give the President of the United States as many tools as possible to regulate the economy

    to make sure all states are given equal access to monetary policy decisions

    to keep the private sector out of the monetary policy making arena

    to keep the power of the Fed dispersed

    1 points

    Question 51

    An increase in money growth will cause inflation to increase in

    the short run only.

    the long run only.

    both the short run and the long run.

    neither the short run nor the long run.

46. In a proportional income tax system,

marginal tax rates increase as the level of taxable income increases.

marginal tax rates are the same regardless of the level of taxable income.

everyone pays the same dollar amount in taxes.

marginal tax rates decline as the level of taxable income declines.

47 A tax system that applies a lower marginal tax rate at higher levels of income is

backward.

regressive.

progressive.

proportional.

48 The average tax rate can be calculated by which of the following formulas?

The change in taxes due divided by the change in taxable income

The change in taxable income divided by the change in taxes due

Total taxable income divided by total taxes due

Total taxes due divided by total taxable income

49 Under a progressive income tax system, the marginal income tax rate paid by taxpayers

declines as their incomes increase

. is unrelated to their incomes.

rises as their incomes increase.

is unchanged as their incomes increase.

50 The tax base is the minimum amount of tax revenue that government must collect each year.

the maximum amount of tax revenue that government must collect each year.

the sum of all incomes earned in the United States.

the value of all goods, services, incomes, or wealth subject to taxation.

51 A capital gain is defined as the tax paid when one sells an asset.

the tax rate one pays when one moves into a higher tax bracket.

an unanticipated increase in income.

the positive difference between the sale price and the purchase price of an asset.

52 Corporate profits are

taxed twiceonce by the corporate tax system, and again by personal tax system when they are paid to stockholders as dividends.

taxed only when a stockholder sells his or her shares of stock.

taxed at too low a rate.

taxed three timesonce by the corporate tax system, again by the personal tax system, and again as capital gains.

53 Social Security taxes are regressive because

they apply only to rich people.

they are not applied to income beyond a certain amount.

they are applied to welfare recipients.

they are applied to retired people only.

54 The largest share of federal government tax receipts is derived from

excise taxes.

individual income taxes.

corporate income taxes.

social insurance contributions.

55 Local government expenditures depend on which taxes?

Social Security taxes

Local property, sales, and excise taxes

Capital gains taxes

Revenues from licenses and permits

56 When the purchase price of an asset is less than its sale price, then there is a

budget deficit.

corporate income tax.

capital gain.

capital loss.

57 The earnings that a corporation saves for investment in other productive activities are

transfers in kind. c

apital gains.

tax incidence.

retained earnings.

58 Tax incidence refers to

determining who sends the taxes into the government.

the distribution of tax burdens among groups, or who really pays a tax.

the tendency of some people to avoid paying taxes at all.

determining the marginal tax rate applied to any increase in income.

59 Social Security taxes are paid by

neither employers nor employees

both employers and employees.

employers only.

employees only.

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