Unit Three Domestic Policy

What are taxes?

• the amount of money citizens and businesses charge the government so they can pay all their bills.

• the amount of money citizens and businesses are required to pay so the government can function and provide services.

• the amount of money citizens and businesses are required to pay so they are protected from criminal organizations.

• the amount of money citizens and businesses pay the government because it makes them happy.

All of the following are government services EXCEPT

• Food Inspectors

• FBI

• Public schools

• Farms

This tax helps fund the basic retirement program run by the federal government.

• Social Security Tax

• Property Tax

• Medicare Tax

• Sales Tax

Medicare is a tax taken out of your paycheck and is

• the federal government's retirement program.

• the federal government's elder care institution.

• the federal government's health care system for people age 65 and over.

• a really poor substitute for private health insurance.

Which of the following explains why a city fireworks display on the Fourth of July is provided as a public good?

• Fireworks displays usually take place in a public area.

• Fireworks are a scarce resource.

• Nonpayers cannot be prevented from seeing the fireworks.

• Each consumer pays a fee to see the fireworks.

A ______ externality occurs when a benefit of production or consumption falls on a 3rd Party.

• Negative
• Neutral
• Positive

Public or Private?

• Public

• Private

Public or Private?

• Public

• Private

Pollution caused by automobiles is an example of

• an innefficient allocation of resources.
• a positive externality.
• a negative externality.
• the public sector.

This tax is on money you receive from wages, rent, interest, and profit.

• excise tax
• estate tax
• income tax
• tariff