ECON 110 Chapter Notes - Chapter 18: Transfer Payment, Tax Rate, Laffer Curve
ECON 110 Full Course Notes
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1.If individual income tax accounts for more total revenue than the payroll tax in the U.S., why would over half the households in the country pay more in payroll taxes than in income taxes?
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income tax is a proportional tax |
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income tax is a progressive tax |
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payroll tax is a regressive tax |
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payroll tax is a progressive tax |
2.If the state of Washington's government collects $75 billion in tax revenues in 2013 and total spending in the same year is $74.8 billion, the result will be a:
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budget deficit. |
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budget surplus. |
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the decrease in the payroll tax. |
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the decrease in proportional taxes. |
3.If South Dakota's governor reports a budget surplus in 2011, that state government likely:
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received more in taxes than it spent in that year. |
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increased the proportional tax level. |
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equalized spending and taxes in that year. |
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increased the corporate income tax rate. |
4.If government tax policy requires Peter to pay $15,000 in tax on the annual income of $200,000 and Paul to pay $10,000 in tax on the annual income of $100,000, then the tax policy is:
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optional. |
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progressive. |
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proportional. |
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regressive. |
5.In 2010, Microsoft will pay corporate income tax to the federal government based on the company's __________________.
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proportional tax rate |
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corporate profits |
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optional tax rate |
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excise profits |
1. In a progressive tax structure
the marginal tax rate exceeds the average tax rate for all but the first category or bracket.
taxes do not change the gap between upper and lower-income groups.
the average tax rate rises as income falls.
all the choices are correct.
2. You earn $40,000 and your income tax is $6,000. When you get a raise to $50,000 your income tax rises to $8,000. Which of the following is true?
Your average tax rate was 15% at $40,000.
Your marginal tax rate between these two incomes was 20%.
Your average tax rate is 16% at $50,000.
All of the above
3. If Person A earns a salary of $40,000 and Person B earns a salary of $800,000:
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Person A will pay the same Medicare tax rate as person B. |
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Person A will pay a larger Medicare tax rate than person B. |
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Person A will pay a smaller Medicare tax rate than person B. |
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The relative Medicare tax rate depends on their exemptions and withholdings. |
4. Net export is a positive figure when
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a nation's exports of goods and services exceed its imports |
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depreciation exceeds gross private domestic investment |
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the economy's stock of capital is declining |
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a nation's imports of goods and services exceed its exports |