PLF & Economics Unit 2 test review (TX)

Which scenario provides the best example of regressive taxation?

• A city implements a tax of 10% on luxury goods, targeting high-end items.

• The federal government increases income tax for earnings over $100,000 annually.

• State inheritance tax rates rise as the size of the estate increases.

  D

• City imposes a 3% property tax on homes, regardless of their market value.

• A) To secure income and strategically influence consumption patterns, a city levies a luxury vehicle tax with rates increasing based on the car's value, ensuring fiscal stability.

• B) To influence real estate transactions, a city enforces a stamp duty on property transfers, with rates increasing as property values increase.

• These are examples of?

• regressive tax

• progressive tax

• flat tax

• inheritance tax

Which BEST describes the problem that the Social Security Act was designed to solve?

• to provide medical care to abandoned unicorns

• social unrest and inequality

• people wanted to safegaurd against misfortunes

• People wanted decent homes to live in near their work

The purpose of the Medicaid tax is to provide ...

(chose the best 2 answers)

• state-sponsored medical care

• retired workers with health insurance benefits

• retired workers with health insurance benefits

• long-term health services for people with disabilities

• benefits to low-income families to ensure access to nutritious food

Which of the following is a basic characteristic of all economic systems?

• government price controls

• Small business owners (entrepreneurs)

• Distribution of goods and services

Which of the following provides insurance to individuals over the age of 65, some individuals with disabilities and individuals with permanent kidney failure?

• Self-insurance

• Social Security

• Medicare

• Medicaid

• Income Tax

• Sales Tax

• Property Tax

• Payroll Tax

Why might economists argue that the United States has a mixed market economic system?

• The government provides the majority of the electricity.

• Private firms and the government both own energy resources.

• Private firms compete with each other to supply consumers with electricity.

What are the characteristics of free market? (choose 3)

• Firms (businesses) allocate goods and services to consumers.

• The government owns the property and factors of production.

• The laws of supply and demand determine prices.

• Competition and choice are common

What are the characteristics of a command economy? (choose 2)

• Property is mostly privately owned

• The government owns the factors of production.

• Entrepreneurs have limited economic opportunities.

• Competition and choice are common