Chapter 14 Review Quizizz

Which of the following statements below describes a regressive tax system?

• the amount of tax paid increases with income

• the average rate of tax falls as income increases

• the average rate of tax decreases with less income

• the average rate of tax is constant as income increases

How is the federal income tax a progressive tax?

• Children pay no taxes, regardless of whether they earn a large income.

• A person with a higher income pays more tax, but the percentage is less.

• The higher the income a person has, the higher the percentage a person pays in taxes. 

• Two married people who file their taxes together will pay more taxes that a single person.

If the government reduces taxes but keeps spending the same, what is the most likely short-term result?

• Budget surplus

• Economic recession

• Balanced budget

• Budget deficit

Which of the following is an example of an indirect tax? (not directly taxing you)

• sales tax

• income tax

• social security

• property tax

Match the following

• customs duty (tariff)

• Payroll tax, composed of Social Security and Medicare

• income tax

• Tax levied on the sale of an asset held for 12 months or longer

• capital gains

• Tax on the sale of foreign goods

• excise tax

• Largest tax, levied on wages, salaries, and earnings of individuals

• FICA

• Tax on the manufacture of goods such as gasoline and telephone services

The federal government plans to fund a major infrastructure project but does not have enough revenue from taxes to cover the cost. Which of the following best explains how the government can still finance the project, and what economic consequence might result?

• The government can print more money to finance the project, which reduces the national debt and boosts investor confidence.

• The government can sell bonds to borrow money, increasing the national debt, but potentially stimulating economic growth in the short term.

• The government can raise interest rates to attract foreign investors, which will reduce its need to borrow or spend tax revenue.

• The government can increase income taxes for all citizens, which immediately reduces both the national debt and inflation.

The major revenue category for state and local governments is:

• income tax

• intergovernmental revenue

• sales tax

• property tax

After intergovernmental revenue, the largest source of revenue for local government is:

• property tax

• sales tax

• income tax

• estate tax

What happens to the percentage of income paid in taxes under a regressive tax system as income increases?

• A) It increases

• B) It decreases

• C) It remains the same

• D) It becomes zero