Question 1

A couple with two dependent children with a taxable income of $12,000 will

Accepted Answer

The answer of A couple with two dependent children with...

Question 2

Which statement is true?

Accepted Answer

According to the latest data from the Office of Management and Budget, the federal government spends more on Social Security and Medicare combined (42% of the budget) than it does on defense (15% of the budget). Both A and B are incorrect as the consumption sector is usually the largest sector of GDP and the interest on the debt is around 1.5-2% of the GDP.

Question 3

The federal personal income tax is

Accepted Answer

The federal personal income tax is a direct tax because it is assessed directly on individuals and not through intermediaries. It is also a progressive tax because as income increases, the tax rate also increases, resulting in a higher tax burden for those with higher income.

Question 4

Which statement is true?

Accepted Answer

The correct statement is D, indicating that the author views the amount of foreign aid given to friends, allies, and poorer countries as relatively insignificant or "chump change" compared to the overall budget or expenditures. This phrase suggests that the author believes the amount is small, especially in the context of a country's total spending or GDP.

Question 5

Which statement is false?

Accepted Answer

According to data from the Congressional Budget Office, the federal government collects more in personal income tax than in Social Security taxes. As of 2020, about 47% of federal revenue came from personal income tax, 36% from payroll taxes (including Social Security taxes), and 7% from corporate income tax. Therefore, statement A is false.

Question 6

Who said this? "The government is best which governs least".

Accepted Answer

This quote is often attributed to Thomas Jefferson, who believed in limited government and individual freedom. However, others have also expressed similar sentiments, such as Henry David Thoreau, who wrote in his essay "Civil Disobedience": "That government is best which governs not at all."

Question 7

Which one of these people said this? "The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest amount of hissing."

Accepted Answer

This quote is commonly attributed to French economist and statesman Jean Baptiste Colbert, who served as finance minister under Louis XIV in the late 17th century. The quote reflects his belief in the importance of taxation as a means of providing revenue for the state, but also his recognition of the need to balance this against the potential for public resentment and resistance.

Question 8

The federal tax on cigarettes is

Accepted Answer

The federal tax on cigarettes is an indirect tax because it is levied on the production or sale of the product, rather than directly on the consumer. Additionally, it is considered regressive because it imposes a higher burden on low-income individuals who are more likely to smoke and spend a larger proportion of their income on cigarettes.

Question 9

Which statement is true?

Accepted Answer

The federal government indeed receives the majority of its tax revenue from the federal personal income tax. This is a significant source of revenue for the government, funding various public services and programs. Options A and C are incorrect; the federal government's fiscal year starts on October 1, not January 1, and net interest on the national debt is a significant expense but has not historically been as high as 15 percent of the federal budget.

Question 10

Which statement is true?

Accepted Answer

The federal government typically collects more in direct taxes, such as income and corporate taxes, than in indirect taxes like sales and excise taxes. Direct taxes are a major source of revenue for the government, directly tied to the income levels of individuals and profits of corporations, making them a significant portion of the government's tax income.

Question 11

Which statement is true?

Accepted Answer

The statement B is true, as the cigarette tax is an example of an excise tax, which is a tax on specific goods or services, such as alcohol, tobacco, and gasoline. 
Statement A is false, as the federal personal income tax is a progressive tax, meaning the percentage of income paid in taxes increases as income increases. 
Statement C is also false, as the tax on gasoline is an example of an indirect tax, which is a tax on goods or services that is collected by an intermediary (such as a retailer) from the person who bears the ultimate economic burden of the tax (usually the consumer).

Question 12

Which statement is true?

Accepted Answer

The answer of Which statement is true?
...

Question 13

In 2010,a married couple with one child earning $32,000 would pay $2,448.00 in payroll tax and $__________ in federal income taxes.

Accepted Answer

In 2010, a married couple with one child earning $32,000 would likely have a low enough taxable income after standard deductions and exemptions to owe very little or no federal income tax, thus making option D (0) the correct answer.

Question 14

Transfer payments are paid mainly to

Accepted Answer

Transfer payments are payments made by the government to individuals or groups for which no goods or services are exchanged. These payments do not reflect any production or exchange of goods or services; they are simply transfers of money from one individual or group to another. Examples of transfer payments include welfare, Social Security, and unemployment benefits, which are paid to individuals to support their living expenses. Therefore, the best choice is individuals (A).

Question 15

Who,among the following,said this? "It is generally allowed by all,that men should contribute to the public charge but according to the share and interest they have in the public peace;that is,according to their estates or riches".

Accepted Answer

This quote is from Sir William Petty, an economist and philosopher of the 17th century who is known for his work on political arithmetic and demography. His ideas on taxation and public finance were influential in shaping economic thought during his time.

Question 16

Statement I: The primary income sources of the rich are dividends,interest,and profit,none of which is subject to the Social Security tax.
Statement II: The payroll tax is the federal government's fastest-growing source of revenue.

Accepted Answer

Statement I is true because dividends, interest, and profit, which are common income sources for the wealthy, are not subject to Social Security tax, which primarily taxes wages and salaries. Statement II is also true as the payroll tax, which funds Social Security and Medicare, has been one of the fastest-growing sources of federal revenue, largely due to increases in the wage base subject to the tax and the growth in employment.

Question 17

After the major income tax decrease for the high income earners in 1981,the federal deficit _______ by 1990.

Accepted Answer

The federal deficit significantly increased after the major income tax decrease for high income earners in 1981, and by 1990, it had essentially tripled. This was a result of reduced revenue from taxes coupled with continued or increased government spending.

Question 18

Who said this? "...the sovereign has only three duties to attend to....first,the duty of protecting the society from violence and invasion ... ;secondly,the duty of protecting ...every member of the society from the injustice or oppression of every other member of it all;and thirdly,the duty of erecting and maintaining certain public works and public institutions,which it can never be for the interest of any individual ...to erect and maintain..."

Accepted Answer

This quote is from the book "The Wealth of Nations" by Adam Smith.

Question 19

The first year of the New Deal was

Accepted Answer

The New Deal was a set of programs and policies implemented by President Franklin D. Roosevelt in response to the Great Depression, which began in 1929. Roosevelt took office in 1933 and immediately began implementing the New Deal, which included a range of measures aimed at alleviating the suffering of those hardest hit by the depression, as well as reforming various aspects of American society and government. Therefore, the first year of the New Deal was 1933.

Question 20

An example of a transfer payment is

Accepted Answer

Old-age pensions are an example of a transfer payment because they involve the government transferring money to individuals without the individuals providing any goods or services in return. This is different from military expenditures, which involve the government paying for goods and services, and from military aid to a foreign country, which involves the government providing money to another government for a specific purpose. Dividends paid to stockholders are also not transfer payments because they come from a private firm rather than the government.

Quiz 7: The Government Sector

A couple with two dependent children with a taxable income of $12,000 will

Which statement is true?

The federal personal income tax is

Which statement is true?

Which statement is false?

Who said this? "The government is best which governs least".

Which one of these people said this? "The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest amount of hissing."

The federal tax on cigarettes is

Which statement is true?

Which statement is true?

Which statement is true?

Which statement is true?

In 2010,a married couple with one child earning $32,000 would pay $2,448.00 in payroll tax and $__________ in federal income taxes.

Transfer payments are paid mainly to

Who,among the following,said this? "It is generally allowed by all,that men should contribute to the public charge but according to the share and interest they have in the public peace;that is,according to their estates or riches".

Statement I: The primary income sources of the rich are dividends,interest,and profit,none of which is subject to the Social Security tax. Statement II: The payroll tax is the federal government's fastest-growing source of revenue.

After the major income tax decrease for the high income earners in 1981,the federal deficit _______ by 1990.

The first year of the New Deal was

An example of a transfer payment is