Unit 2: Macroeconomics and Your Finances

What is an example of a regressive tax at the national level?

• Sales tax

• Property tax

• Corporate income tax

• Progressive income tax

Which of the following is a reason for federal income taxation in the United States?

• To discourage saving

• To fund public goods and services

• To increase inflation

• To redistribute wealth

In a mixed economic system, what does the spectrum between pure market and pure command systems represent?

• Degree of government intervention in the economy

• Number of private businesses

• Availability of natural resources

• Impact of tariffs on imports

Which macroeconomic goal focuses on keeping prices stable and avoiding inflation?

• Full employment

• Economic growth

• Price stability

• Fiscal policy

How do government decisions on fiscal policies impact interest rates in the economy?

• They have no effect on interest rates

• They always increase interest rates

• They always decrease interest rates

• They can influence interest rates

A tax that takes a larger percentage of income from low-income earners than high-income earners is known as:

• Progressive tax

• Regressive tax

• Flat tax

• Value-added tax

What is one purpose of Social Security taxation in the U.S.?

• Fund Medicare for individuals over 65

• Provide income support for retirees

• Subsidize college education

• Reduce corporate profits

Which economic system allows individuals to own, operate, and profit from their own businesses?

• Command system

• Market system

• Mixed economy

• Traditional economy

The goal of achieving full employment in the United States primarily aims to:

• Increase competition between businesses

• Reduce government spending

• Support economic growth and stability

• Eliminate international trade

How does the U.S. free enterprise system encourage innovation?

• By limiting individual freedom

• By punishing risk-taking

• By providing legal protection for intellectual property

• By promoting government control