Economics 99

which is an argument against the use of the ability-to-pay principal of taxation?

it reduces the incentive to work hard and take risks to succeed.

people who earn more money have benefitted more from society.

people are not willing to pay unless they receive something in return.

it is difficult to determine who receives benefits from government spending.

read the scenario.

kim received a small raise at work so that her salary went from $58,000 per year to $60,000 per year. she is concerned that it might move her to the next tax bracket.

why would kim be concerned about that?

if she moves into another bracket, she would be forced by law to use an accountant to file taxes.

if she moves into another bracket, she will no longer receive a tax return.

if she moves into another bracket, she can no longer use the 1040ez.

if she moves into another bracket, she will pay a higher percentage for a portion of her taxes.

which is an accurate comparison of corporate income taxes and individual income taxes?

corporate income taxes are approximately 50 percent of individual income taxes.

corporate income taxes are just about equal to individual income taxes.

corporate income taxes are less than a quarter of individual income taxes.

corporate income taxes are over twice as much as individual income taxes.

what is true regarding tax revenue at the state level?

many states rely on excise taxes to generate revenue.

many states rely on sales taxes to generate revenue.

many states rely on medicare taxes to generate revenue.

many states rely on social security taxes to generate revenue.

why is tax reform needed in the united states?

the tax system has become overly complex and is losing some of its efficiency.

current income taxes are regressive but need to become progressive.

what is true regarding transfer payments?

they do not result in the purchase of a good by the federal government.

they are used to purchase goods for the federal government.

they are used by state governments to send money to the federal government.

they are not used to provide services from the state governments.

what is an example of government expenditure that positively affects the economy?

the government increases tariffs with foreign nations, resulting in a trade freeze.

the government opens a military base in a small town, increasing demand for local products.

the government increases corporate taxes, causing prices of goods to increase.

the government increases regulations on the airline industry, increasing barriers to entry.

the existing system makes it impossible to collect enough revenue.

the constitution does not allow income tax collection even though it occurs.

what is the result of government spending on higher education?

private universities have lower tuition rates than do public universities.

public universities have lower tuition rates than do private universities.

public universities are able to operate while running yearly deficits.

private universities lack research-based programs compared to public universities.

what is true about the federal budget?

the president can veto portions of the budget that are wasteful.

congress cannot remove anything from the budget unless the president agrees.

the president develops it and presents it to congress for approval.

congress is required to balance the budget each year.

what role do state governments play in funding education?

they provide significant funds for education.

they play a minor role in funding education.

they are the sole providers of education funds.

they fund only institutions of higher education.

what is true regarding local government budgets?

(select all that apply.)

large portions of local budgets support elementary education.

localities fund social security benefits for retired residents.

revenue comes from intergovernmental payments.

expenditures include police and fire departments.

cial welfare programs enacted by the government to people in need focus on which primary areas?

(select all that apply.)

tuition assistance

medical care

housing

food

what is the difference between government deficit and national debt?

government deficit is money owed to other countries; national debt is a shortage of currency.

government deficit is a yearly discrepancy; national debt is accumulated over time.

government deficit is solved by taxation; national debt is solved by taking out loans.

government deficit is caused by poor laws; national debt is caused by too many taxes.

what is true about the united states national debt?

it leads to rapid inflation and rising unemployment.

it was the cause of the 2008 housing market crash.

it has resulted in significant cuts to social security and medicare.

it requires the government to pay large yearly interest payments.