ECO 372T Wk 3 - Apply: Public Finance and Aggregate Demand and Supply Test

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ECO 372T Wk 3 - Apply: Public Finance and Aggregate Demand and Supply Test

Which of the following descriptions is most representative of the mix of revenues and expenditures of the federal government?

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

Which is the most important source of tax revenue for local governments?

A tax is regressive if it

Use the following graph to answer the next question.

In the diagram, the economy's relevant aggregate demand and long-run aggregate supply curves, respectively, are lines ____

A decrease in labor costs will cause aggregate ____

An increase in aggregate demand is most likely to be caused by a(n) ____

An expected increase in the prices of consumer goods in the near future will _____.

If the national incomes of our trading partners increase, then our aggregate demand _____.

The aggregate demand curve shows the __

Use the following table which shows the aggregate demand and aggregate supply schedules for a hypothetical economy to answer the next question. 

 The equilibrium price and output levels will be _____.    

The foreign purchases, interest rate, and real-balances effects explain why the ____________.

To track the public debt over time and understand its significance to the economy, it is best

Use the following graph, which shows an aggregate demand, to answer the next question.

If the economy is at point C and the price level increases by 100, then the real balances, interest-rate, and foreign purchases effects will ___

Which of the following descriptions is most representative of the mix of revenues and expenditures of a local government?

Revenue is predominantly from income taxes and payroll taxes. Expenditures include income security and interest on debt.

Revenue is predominantly from sales taxes and may include personal or corporate income taxes. Expenditures include investments in education and infrastructure.

Revenue is predominantly from property taxes but may include sales taxes or income taxes. Expenditures include investments in education and public welfare.

Revenue is predominantly from excise taxes and property taxes. Expenditures include investments in infrastructure and national defense.

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

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 imposes a tax on cigarette purchases to discourage smoking.

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

The Social Security tax is regressive because

Multiple Choice

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

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

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

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

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

Multiple Choice

Health and hospitals

Highways

Public welfare

Education

A federal budget deficit exists when federal government

Multiple Choice

spending exceeds tax revenues in a given year.

spending is increasing in a given year.

taxation is decreasing in a given year.

assets are less than liabilities in a given year.

Most economists believe that property taxes

Multiple Choice

should become an important source of revenue for the federal government.

are regressive.

should be eliminated.

are progressive.