Ch 14 Quiz: Taxes

What is the main purpose of a sin tax?

• revenue generation

• behavior adjustment

• income redistribution

• resource allocation

Which of the following best identifies the incidence of the individual income tax?

• frequency

• workers

• corporation

• wages

An economist might argue that a progressive income tax is effective because it is _______.

• equitable

• simple

• beneficial

• profitable

Which of the following is the single largest source of federal revenue?

• individual income tax

• corporate income tax

• borrowing

• Medicare payroll taxes

Which of the following is the single largest federal expenditure?

• national defense

• Social Security

• interest

• Medicare

“The most important source of state government revenue.” “Primarily transferred from federal government to state governments.” “The most important source of local government revenue.” All of these statements are true of _______.

• taxes

• income tax revenue

• transfer payments

• intergovernmental revenue

Elementary schools, police departments, and electrical service are typically paid for by _______.

• the federal government

• state governments

• local government

• natural monopolies

Exceptions or oversights in the tax law that allow taxpayers to avoid taxes are called tax ________________.

Which entity is a branch of the U.S. Treasury Department that collects taxes?

• IRS

• FDIC

• FDA

• FED

Which type of tax is levied on the sale of an asset held for 12 months or longer?

• excise tax

• sin tax

• capital gains tax

• progressive tax