NO EXPLANATION NEEDED PLEASE STATE IF ANSWER IS A, B, C OR D

The tax ________ is the measure or value upon which a government levies a tax.

a.

Structure

b.

Incidence

c.

Base

d.

Rate

The economy is currently producing below its potential GDP. Using fiscal policy tools, the government can correct this situation by.............. government spending and ......... taxes.

a.

Increase; Decrease

b.

Decrease; Increase

c.

Decrease; Decrease

d.

increase; increase

Using expansionary fiscal policy tools, the government might .......................government spending and ..................... taxes.

a.

Increase; Increase

b.

Increase; Decrease

c.

Decrease; Increase

d.

Decrease; Decrease

A family that earns $20,000 a year pays $200 a year in clothing taxes. A family that earns$40,000 a year pays $800 a year in clothing taxes. The clothing tax is a ________ tax.

a.

Benefits-received

b.

Progressive

c.

Regressive

d.

Proportional

Which of the following taxes is based on the benefit principle?

a.

Sales tax.

b.

Income tax.

c.

Luxury tax.

d.

Bridge toll.

The marginal propensity to consume is the change in consumption expenditure divided by the percentage change in income.

Select one:

True

False

Which of the following represents a regressive income tax system?

a.

People who earn $40,000 pay $4,000 in taxes while people who earn $60,000 pay $7000.

b.

People who earn $20,000 pay $3,000 in taxes while people who earn $10,000 pay $1500.

c.

People who earn $30,000 pay $3,000 in taxes while people who earn $50,000 pay $4500.

d.

People who earn $4000 pay $1,000 in taxes while people who earn $10,000 pay $2500.

Which of the following isnota reason why fiscal policy is less efficient in real - world applications than in theory?

a.

Liquidity traps.

b.

Administrative lags.

c.

Fiscal policy is implemented through a political process.

d.

Recognition lags.

The burden of a ________ tax falls as a percentage of income as income rises.

a.

Progressive

b.

Proportional

c.

Benefit-received

The information below represents the aggregate expenditure function of a

Y = C + I + G

I = 500

G = 300

C = 100 + 0.8(Y-T)

a.

Private closed economy

b.

Private open economy

c.

Open economy

d.

Closed economy

If the marginal propensity to consume is 0.9, the marginal propensity to save is 0.01.

Select one:

True

False

d.

Regressive