ECO 372T Wk 3 - Practice: Public Finance and Aggregate Demand and Supply Quiz

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ECO 372T Wk 3 - Practice: Public Finance and Aggregate Demand and Supply Quiz

Which of the following transactions best represents the government playing the role of provider of a good or service?

The state government imposes a tax on cigarette purchases to discourage smoking.

The local government purchases office furniture for renovations to its Department of Parks and Recreation.

The federal government provides Social Security checks to those citizens who qualify for the payment.

The state government pays for police to patrol the state and federal roadways.

Which of the following transactions best represents the government making a transfer payment to a household or business?

The federal government’s Supplemental Nutritional Assistance Program assists low-income families with purchasing food.

The state government’s Office of Motor Vehicles imposes an annual licensing fee for all in-state vehicles.

The federal government’s Internal Revenue Service hires extra accountants during the tax season to audit tax returns.

The local government’s Department of Parks and Recreation operates a local pool for residents in the summer.

The Social Security tax is regressive because

Multiple Choice

as income increases, the Social Security tax rate increases at a decreasing rate.

each individual must pay a set percentage of his or her income in Social Security taxes.

the Social Security tax rate applied does not rise with the salary level.

no Social Security tax is collected for incomes in excess of a "cap" income level.

How is the public debt calculated?

Multiple Choice

By subtracting the government’s total liabilities from its total assets

By summing the annual difference between tax revenues and government spending over the years

By subtracting current government spending from current government tax revenues

By summing the annual government purchases over time

A federal budget deficit exists when federal government

Multiple Choice

spending is increasing in a given year.

spending exceeds tax revenues in a given year.

taxation is decreasing in a given year.

assets are less than liabilities in a given year.

Which of the following is the largest expenditure item of state governments?

Multiple Choice

Education

Public welfare

Health and hospitals

Highways

Which of the following is the largest expenditure item of local governments?

Multiple Choice

Public safety

Education

Welfare

Highways

Many states in the U.S. acquire significant amounts of funds from the following, except

Multiple Choice

personal income taxes.

state-run lotteries.

property taxes.

grants from the Federal government.

A public debt that is owed to foreigners can be burdensome because

Multiple Choice

foreign interest rates are persistently higher than domestic interest rates.

the payment of interest will conflict with a nation's foreign aid programs.

the payment of interest reduces the volume of goods and services available for domestic uses.

the payment of interest will necessarily have a deflationary effect on prices in the paying nation.

Which of the following is not a significant source of revenue for the U.S. federal government?

Multiple Choice

Corporate income taxes

Property taxes

Payroll taxes

Personal income taxes

Which one of the following is not an excise tax of the federal government?

Multiple Choice

Tobacco tax

General sales tax

Alcoholic beverage tax

Gasoline tax

Social Security contributions are part of

Multiple Choice

excise taxes.

payroll taxes.

indirect taxes.

reverse taxes.

Public finance is the subdiscipline of economics that studies the various ways in which

Multiple Choice

firms in the financial sector provide services to households and firms.

governments may regulate and promote the stability of the financial sector.

governments raise and expend money.

the general public acquires financing for their purchases.

Which of the following is not a government activity that is involved in public finance?

Multiple Choice

Providing public goods and services such as national defense and education.

Regulating the activities of firms in the financial sector of the economy.

Running government-owned enterprises such as hospitals, utilities, and lotteries.

Redistributing income through various taxes and income-transfer payments.