Chp 14 - Taxes

What is the main purpose of a sin tax?

• revenue generation

• behavior adjustment

• income redistribution

• resource allocation

Which statement is most accurate about the debt ceiling?

• It requires that new spending proposals or tax cuts must be offset by reductions elsewhere.

• It authorizes spending on new entitlement programs.

• It allows borrowing for spending that Congress has already authorized.

• It's the total amount borrowed from investors to finance the government's deficit spending.

Which of the following is the single largest source of federal revenue?

• individual income tax

• corporate income tax

• borrowing

• Medicare payroll taxes

Which of the following is the single largest federal expenditure?

• national defense

• Social Security

• interest

• Medicare

Elementary schools, police departments, and electrical service are typically paid for by

• the federal government

• state governments

• local government

• natural monopolies

“Those who benefit from government goods and services should pay in proportion to the amount of benefits they receive.” So states the

• benefit principle

• ability-to-pay rule

• incidence of tax

• alternative minimum tax

In discussing taxes, which is the opposite of regressive?

• progressive

• flat

• value-added

• alternative

Which is the primary source of revenue for the federal government?

• borrowing

• duties

• taxes

• fees

Which of the following is an example of federal mandatory spending?

• Social Security

• national defense

• income security

• Medicare

States receive most of their intergovernmental revenue funds from

• other state governments

• local governments

• public utilities

• the federal government