Econ Unit 4 Lesson 11 & 12 Test Review

What is a corporate income tax?

• A tax on the wages a company pays its employees.

• A tax applied to the profits of a corporation.

• A tax on the purchase of goods and services.

• A tax on the consumption of certain goods and services.

Which of the following is an example of discretionary spending?

• Social Security benefits

• Medicare

• Defense budget

• Unemployment insurance

What is the purpose of excise taxes?

• To fund Social Security benefits

• To discourage consumption of certain goods

• To provide benefits to individuals based on income

• To tax the profits of corporations

What is a progressive tax?

• A tax that takes the same share of income at all income levels

• A tax that takes a larger share of income as income increases

• A tax that takes a smaller share of income as income increases

• A tax on the assets left to heirs by someone who dies

What is the national debt?

• The total amount owed by a nation's government as a result of borrowing

• A shortfall between government revenues and expenditures in any given year

• A tax on the consumption of certain goods and services

• A tax on the wages a company pays its employees

What is regulatory capture?

• The process of removing government restrictions on firms

• A situation where a regulatory agency is dominated by the industry it regulates

• The combining of two or more separately owned firms into a single firm

• An illegal practice where firms agree to set a common price for a good or service

What is a cap and trade policy?

• A policy that sets a maximum amount of a resource a person can use

• A policy that limits pollution but allows firms to trade permits

• A policy that relies on rules and enforcement to influence behavior

• A policy that provides cash payments to workers who lose jobs

What is the purpose of a W-2 form?

• To list a worker’s wages for the previous year and the amount of tax withheld

• To provide a direct payment of cash by the government to individuals

• To allow a producer to emit a specific amount of pollution

• To set and enforce standards for specific industries

A tax that takes a larger share of income as income increases

• Value-added tax
• Regressive tax
• Flat tax
• Progressive tax

What is the primary purpose of an excise tax?

• To provide subsidies for local businesses.
• To discourage the consumption of certain goods.

• To regulate the prices of essential goods.
• To fund public transportation projects.