Econ Topic 8

Which type of tax takes a higher percentage of income from poorer people than from wealthier people?

• regressive
• proportional
• progressive
• excise

Which of the following is an example of a program where federal and state governments share the cost?

• military defense
• Medicare
• Social Security
• highway construction

Which of the following are two characteristics of a good tax?

• efficiency and complexity
• certainty and elasticity
• equity and elasticity
• simplicity and equity

What does this graph show about who pays for a $.50 tax increase on a given good in a market where demand for the good is elastic?

• consumers and suppliers split the burden of the tax increase
• consumers pay $.10 and suppliers absorb $.40 of the tax increase
• consumers pay $.40 and suppliers absorb $.10 of the tax increase
• consumers pay $.40 of the tax increase, and the rest is not collected by the government

How are Social Security, Medicaid, and the unemployment insurance program related?

• All provide benefits to retired persons
• All provide some kind of healthcare
• All provide cash to poor people
• All are mandatory spending programs

A significant part of federal aid to state and local governments goes toward

• funding social programs.
• supporting the armed forces stationed there.
• maintaining crime labs.
• paying their share of interest on the national debt.

Which of the following is a discretionary spending program?

• interest on the debt
• unemployment compensation
• Social Security
• national defense

Which of the following would be paid for MAINLY by local taxes?

• the construction of an interstate highway that passes through a city
• the building of a new army recruiting office in town
• the maintenance of a town's sewer and water systems
• the addition of a science center at a local public university

Which type of tax is levied at the same percentage for people at all income levels?

• proportional
• progressive
• inelastic
• regressive

Federal income tax is collected on a "pay as you earn" system. This means that individuals usually pay most of their income tax throughout the calendar year as they earn income.  What is another name for the system described above?

• mandatory spending
• progressive taxation
• withholding
• incentive taxation