Economics Principles & Practices

Chapter 9: Sources of Government Revenue

Self-Check Quizzes

1
The 1991 luxury tax taxed expensive goods. The resulting higher prices drove customers away, and unemployment soared in some of these industries because the demand for luxury goods was __________.
A)unit elastic
B)inelastic
C)elastic
D)cross elastic
2
The tax on people's earnings, the __________ tax, is a prime example of a complex tax.
A)corporate
B)usage
C)sales
D)individual income
3
The gasoline tax is based on the __________ principle of taxation, the principle that those who benefit from government goods and services should pay in proportion to the amount of benefits received.
A)graduated
B)wage
C)ability-to-pay
D)benefit
4
The individual income tax is based on the __________ principle of taxation.
A)wage
B)ability-to-pay
C)benefit
D)proportional
5
According to the current individual tax tables structure, individuals in higher income tax brackets pay higher marginal taxes than people in lower tax brackets. This is an example of a __________ tax.
A)progressive
B)regressive
C)proportional
D)flat
6
The __________ is taxed separately from individuals because it is recognized as a separate legal entity.
A)proprietorship
B)partnership
C)entrepreneurship
D)corporation
7
A(n) __________ tax is the tax the government levies on the transfer of property when a person dies. These taxes can range from 18 to 50 percent of the value of the estate.
A)gift
B)sales
C)estate
D)individual
8
The category called ___________ revenue are funds collected by one level of government that are distributed to another level of government for expenditures.
A)intergovernmental
B)state
C)local
D)government level
9
The summary statement attached to a paycheck that summarizes income, tax withholdings, and other deductions is the __________ statement.
A)individual withdrawal
B)government withholding
C)tax withdrawal
D)payroll withholding
10
The second largest source of revenue for state governments is the __________.
A)personal income tax
B)sales tax
C)corporate income tax
D)property tax
11
The concept of a flat tax is a(n) ____________ tax on individual income after a specified threshold has been reached. It was promoted as a way to both simplify taxes and stimulate economic growth.
A)excise
B)regressive
C)progressive
D)proportional
12
The main disadvantage of the VAT is that it ____________.
A)is invisible to consumers
B)falls on producers
C)is too progressive
D)is based on the benefit principle of taxation
13
The current individual tax code is now ____________.
A)invisible to consumers
B)more complicated than at any time in our history
C)flatter than it was in 1992
D)based on the benefit principle of taxation
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