Question 1

A flat tax would increase the possibilities of abuses and misrepresentations that go with tax deductions.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following accounted for the highest percentage of federal government spending in 2010?

Accepted Answer

A)   net interest on the national debt
B)   income security
C)   Medicare
D)   Social SecurityE) B) and D)
F) B) and C)

Question 3

A flat tax plan with a standard deduction of $25,000 in income and a tax rate of 20% would require an individual earning $100,000 to pay $15,000 in income taxes.

Accepted Answer

A) True 
 B)False

Question 4

What is the ability to pay principle? Does the U.S.federal income tax follow this principle or not? Explain your answer.

Accepted Answer

The ability to pay principle is simply t...

Question 5

The median voter model implies that:

Accepted Answer

A)   most voters will have about the same preferences for goods and services provided through government.
B)   a candidate may adopt more extreme views when seeking her party's nomination than during the general election.
C)   political voting will be as economically efficient as voting with dollars in competitive markets.
D)   none of the aboveE) A) and D)
F) A) and C)

Question 6

The median voter model predicts a strong tendency for both candidates to choose a position away from the middle of distribution.

Accepted Answer

A) True 
 B)False  False

Question 7

The process by which a legislator votes in favor of the legislation of other lawmakers in order to gain support for her own legislation is known as:

Accepted Answer

A)   pork barrel legislation.
B)   logrolling.
C)   the median vote model.
D)   none of the aboveE) A) and B)
F) A) and C)

Question 8

A special interest issue is best described as:

Accepted Answer

A)   one in which both sides utilize paid lobbyists to represent them.
B)   one which one party strongly supports and the other party strongly opposes.
C)   one in which a large number will each suffer small costs and a small number will each receive large benefits.
D)   one decided in a special session of the legislature.E) A) and B)
F) B) and C)

Question 9

Public choice theory assumes that voters,politicians,and other political participants are largely motivated by:

Accepted Answer

A)   personal self-interest.
B)   altruism.
C)   a desire to promote the general welfare.
D)   a desire to promote allocative economic efficiency.E) None of the above
F) B) and C)

Question 10

Rational voter ignorance can lead politicians to:

Accepted Answer

A)   favor programs with immediate and clear benefits and unclear and deferred costs.
B)   fail to take all the benefits and costs of a program fully into account in deciding on which policies to favor.
C)   do a poor job of overseeing the actions of public sector bureaus.
D)   all of the aboveE) A) and D)
F) A) and C)

Question 11

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages.Assume that the flat tax rate is 12%.
Refer to Exhibit 9-1.How much income tax would you have to pay if you were earning $20,000 a year?

Accepted Answer

A)   $2,400
B)   $1,200
C)   $3,000
D)   zeroE) B) and C)
F) All of the above

Question 12

Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?

Accepted Answer

A tax on prescriptions drugs would most likely be regressive.Prescription medication is essentially a necessity.The dollar amount of the taxes would not vary between households based on income.However,the same dollar amount would represent a smaller percentage of the income for a high-income household while representing a larger percentage of the income of a low-income household.

Question 13

Tax collected based on a taxpayer's spending is known as:

Accepted Answer

A)   excise tax.
B)   consumption tax.
C)   gift tax.
D)   income tax.E) B) and D)
F) A) and C)

Question 14

What are the advantages of a flat tax system?

Accepted Answer

The advantages of the flat tax are that ...

Question 15

Which of the following statements best summarizes the essence of public choice analysis?

Accepted Answer

A)   Public choice analysis applies economic principles to political science issues.
B)   Public choice analysis applies political science principles to traditionally economic issues.
C)   Public choice analysis assumes that government leaders are primarily motivated by what is best for the community, unlike private interest groups.
D)   none of the aboveE) A) and B)
F) All of the above

Question 16

Which of the following explains why it is difficult to reduce government spending by reducing one program at a time?

Accepted Answer

A)   There is limited support from millions of taxpayers who will save only a few dollars each if a program is eliminated.
B)   The views of the masses generally outweigh those of the special interest groups.
C)   Most people are willing to cut spending on programs that affect them but are not willing to do so for programs that affect others.
D)   none of the aboveE) None of the above
F) A) and B)

Question 17

The benefits received principle suggests that:

Accepted Answer

A)   traditional exemptions should be removed since they benefit people with ability to pay more taxes.
B)   people with different levels of income should be treated in the same manner.
C)   individuals receiving the benefits should be those who pay for them.
D)   those with the greatest ability to pay taxes should pay more than those with the least ability to pay taxes.E) None of the above
F) All of the above

Question 18

A progressive tax:

Accepted Answer

A)   is designed to take a larger percentage of higher incomes as compared to lower incomes.
B)   takes a greater proportion of the income of lower-income groups than of higher-income groups.
C)   is designed so that everybody would be charged the same percentage of their income.
D)   is designed to take a smaller percentage of higher incomes as compared to lower incomes.E) None of the above
F) A) and B)

Question 19

A flat tax plan allows individuals to deduct a standard allowance of $10,000 from their wages.Assume that the flat tax rate is 12%.Calculate the amount of income tax and the average tax rate if you were earning:
1.$30,000 a year,
2.$60,000 a year.

Accepted Answer

The answer of A flat tax plan allows individuals to...

Question 20

The view that those whose preferences represent the middle position on an issue will tend to determine the outcome of an election is called:

Accepted Answer

A)   rent seeking.
B)   the median voter model.
C)   the special interest effect.
D)   the cyclical majority problem.E) A) and B)
F) A) and C) B

Exam 9: Public Finance and Public Choice

A flat tax would increase the possibilities of abuses and misrepresentations that go with tax deductions.

Correct Answer
verified

Which of the following accounted for the highest percentage of federal government spending in 2010?

Correct Answer
verified

A flat tax plan with a standard deduction of $25,000 in income and a tax rate of 20% would require an individual earning $100,000 to pay $15,000 in income taxes.

Correct Answer
verified

What is the ability to pay principle? Does the U.S.federal income tax follow this principle or not? Explain your answer.

Correct Answer
verified
The ability to pay principle is simply t...
View Answer

The median voter model implies that:

Correct Answer
verified

The median voter model predicts a strong tendency for both candidates to choose a position away from the middle of distribution.

Correct Answer
verified
False

The process by which a legislator votes in favor of the legislation of other lawmakers in order to gain support for her own legislation is known as:

Correct Answer
verified

A special interest issue is best described as:

Correct Answer
verified

Public choice theory assumes that voters,politicians,and other political participants are largely motivated by:

Correct Answer
verified

Rational voter ignorance can lead politicians to:

Correct Answer
verified

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages.Assume that the flat tax rate is 12%. Refer to Exhibit 9-1.How much income tax would you have to pay if you were earning $20,000 a year?

Correct Answer
verified

Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?

Tax collected based on a taxpayer's spending is known as:

Correct Answer
verified

What are the advantages of a flat tax system?

Correct Answer
verified
The advantages of the flat tax are that ...
View Answer

Which of the following statements best summarizes the essence of public choice analysis?

Correct Answer
verified

Which of the following explains why it is difficult to reduce government spending by reducing one program at a time?

Correct Answer
verified

The benefits received principle suggests that:

Correct Answer
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A progressive tax:

Correct Answer
verified

A flat tax plan allows individuals to deduct a standard allowance of $10,000 from their wages.Assume that the flat tax rate is 12%.Calculate the amount of income tax and the average tax rate if you were earning: 1.$30,000 a year, 2.$60,000 a year.

Correct Answer
verified

The view that those whose preferences represent the middle position on an issue will tend to determine the outcome of an election is called:

Correct Answer
verified
B

Exam 9: Public Finance and Public Choice

A flat tax would increase the possibilities of abuses and misrepresentations that go with tax deductions.

Correct AnswerverifiedShow Answer

Which of the following accounted for the highest percentage of federal government spending in 2010?

Correct AnswerverifiedShow Answer

A flat tax plan with a standard deduction of $25,000 in income and a tax rate of 20% would require an individual earning $100,000 to pay $15,000 in income taxes.

Correct AnswerverifiedShow Answer

What is the ability to pay principle? Does the U.S.federal income tax follow this principle or not? Explain your answer.

Correct AnswerverifiedThe ability to pay principle is simply t...View AnswerShow Answer

The median voter model implies that:

Correct AnswerverifiedShow Answer

The median voter model predicts a strong tendency for both candidates to choose a position away from the middle of distribution.

Correct AnswerverifiedFalse

The process by which a legislator votes in favor of the legislation of other lawmakers in order to gain support for her own legislation is known as:

Correct AnswerverifiedShow Answer

A special interest issue is best described as:

Correct AnswerverifiedShow Answer

Public choice theory assumes that voters,politicians,and other political participants are largely motivated by:

Correct AnswerverifiedShow Answer

Rational voter ignorance can lead politicians to:

Correct AnswerverifiedShow Answer

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages.Assume that the flat tax rate is 12%. Refer to Exhibit 9-1.How much income tax would you have to pay if you were earning $20,000 a year?

Correct AnswerverifiedShow Answer

Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?

Tax collected based on a taxpayer's spending is known as:

Correct AnswerverifiedShow Answer

What are the advantages of a flat tax system?

Correct AnswerverifiedThe advantages of the flat tax are that ...View AnswerShow Answer

Which of the following statements best summarizes the essence of public choice analysis?

Correct AnswerverifiedShow Answer

Which of the following explains why it is difficult to reduce government spending by reducing one program at a time?

Correct AnswerverifiedShow Answer

The benefits received principle suggests that:

Correct AnswerverifiedShow Answer

A progressive tax:

Correct AnswerverifiedShow Answer

A flat tax plan allows individuals to deduct a standard allowance of $10,000 from their wages.Assume that the flat tax rate is 12%.Calculate the amount of income tax and the average tax rate if you were earning: 1.$30,000 a year, 2.$60,000 a year.

Correct AnswerverifiedShow Answer

The view that those whose preferences represent the middle position on an issue will tend to determine the outcome of an election is called:

Correct AnswerverifiedB

Correct Answer
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Correct Answer
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Correct Answer
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The ability to pay principle is simply t...
View Answer

Correct Answer
verified

Correct Answer
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False

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The advantages of the flat tax are that ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B