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After 1970, the share of federal spending allocated to national defense:
declined sharply
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Which of the following countries had the highest level of government expenditures as a share of GDP?
Sweden
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Total government spending sums to approximately
40% of US economy
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Measured as a share of the economy, government expenditures:
rose from less than 10% in 1929 to nearly 35% percent in 2009
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The income security program category for federal government outlays includes spending for
all of these
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How does total taxes as a percentage of GDP in the US compare to those of western european countries, such as the UK, Germany, and Sweden?
US taxation is smaller
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When the tax structure of a nation is progressive, as income increase, the tax rate
increases
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"It would be an undue hardship to require people whose income is below 15,000 per year to pay income taxes." this statement reflects which of the following principles for a tax?
ability-to-pay
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"He who pays a tax should receive the benefit from the expenditure financed by the tax." this statement reflects which of the following principles for a tax?
fairness of contribution
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Which of the following answers best reflects the ability-to-pay philosophy of taxation?
progressive income tax
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Which of the following is an example of a progressive tax?
the federal personal income tax
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A tax is regressive if it collects a:
smaller fraction of income as income rises
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Which of the following can be classified as a regressive tax?
federal gasoline tax
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A tax is proportional if, as a persons income rises, the:
amount of the tax is constant
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In exhibit 12-2, we can tell that the tax shown here is:
proportional
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Suppose a person with an income of 20,000 pays a tax of 2,000. It the tax is progressive, then how large of a tax will a person with an income of 40,000 pay?
more than 4,000
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Which of the following US taxes is the most consistent with the ability-to-pay principle?
the federal income tax
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People who often create benefits for the minority and impose the cost on the majority are called:
special-interest groups
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The choice of a voter to remain uninformed because the marginal cost of obtaining information is greater than the marginal benefit from obtaining knowledge is called:
rational ignorance
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Who is recognized as the founder of public choice theory?
James Buchanan
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According to the shortsightedness effect, politicians tend to favor projects with:
short-run benefits and long-run costs
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If congress fails to pass a budget before the fiscal year starts, then federal agencies may continue to operate only if congress has passed a:
continuing resolution
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If the fiscal year begins without a budget and congress fails to pass continuing resolution, then:
the federal government shuts down
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Between 1998 and 2001, the federal budget was
in surplus
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Which of the following is true?
a budget deficit will ^ with national debt
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When the US federal government runs a budget deficit, it borrows money by selling:
treasury bills, notes and bonds
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Indebtedness of the federal government in the form of outstanding interest-earing government security
national debt
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If the federal government has a budget surplus, then the national debt is
reduced
-
Which of the following is true about the current US national debt?
is over 12.0 trillion
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Currently, the national debt is approximately
60% of GDP
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When measured as a percentage of GDP, the US national debt reached its highest levels as a result of
World War II
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Which of the following countries has the largest national debt as a percentage of GDP?
Japan
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In recent years, net interest on the national debt paid by the federal government as a percentage of GDP is equal to approximately
1-3%
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External debt is that portion of the national debt
held by foreigners
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Which of the following owns the largest proportion of the national debt?
federal, state, and local govern and federal reserve
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Currently, how much of the US national debt is owned to foreigners?
30%
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In terms of productions possibilities curve, the benefits of trade between two nations are that each nation moves to a higher
consumption possibility combination
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Opening trade between two nations would
leave production possibility unchanged and ^ consumption possibility
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In exhibit 18-1, the production possibilities curve of wheat and corn for Nabia and Pada are presented. In Nabia the cost of producing one more unit of wheat is equal to
1/4 units of corn
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In exhibit 18-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. In Nabia the cost of producing one more unit of corn is equal to
4 units of wheat
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In exhibit 18-1, the production possibilities curve of wheat and corn for Nabia and Pada are presented. In Pada the cost of producing one more unit of corn is equal to
3 units of wheat
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In exhibit 18-1, the production possibilities curve of wheat and corn for Nabia and Pada are presented. In Pada the cost of producing one more unit of wheat is equal to
1/3 unit of corn
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Comparative advantage indicates that
a nation can gain from trade even when it is an absolute disadvantage in producing all goods
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