Economics JANUARY QUARTERLY
SENIOR SOCIAL STUDIES
Government and Taxes
JANUARY 26, 2005
Mrs. Rieffel TIME:
50 MINUTES
I. True or
False. Mark a) to indicate True or b) to
indicate False for each of the following.
1. Since
the 1930s, government participation in the economy has grown dramatically.
2.
Inflation is one of the major causes of economic instability in the
3. National
defense and public assistance takes a huge chunk of change from the federal
budget.
4. A common
synonym for "outlays" would be "expenditures".
5. Social
security may be doomed since the birth rate is lower and the percentage of
elderly is living even longer.
6. Gasoline
taxes used for highway improvement is an example of a benefits-received tax.
7. Income
taxes automatically adjust to the state of the economy.
8. When
governments levy taxes, they are, in effect, redistributing the income of
taxpayers.
9. The
nearest thing that we have to a proportional tax in the
10. All
taxes are based on a percentage of personal income.
11. Taxes
may be levied to make it easier or more difficult for people to spend money.
12. All
taxpayers are required to fill out a long, complicated form listing deductions
from taxable income.
13. The
corporate income tax subjects the owners of corporations to pay exactly as if
the corporation was an ordinary individual.
14. The
sales tax is an example of a proportional tax.
15.
Politicians are attracted to excise taxes because people are often
unaware that they are paying them.
16.
Taxpayers may claim an exemption for each dependent.
17. A flat
tax would probably make income tax forms even more complex.
18. A gift
tax is to prevent wealthy people from giving away all of their property so that
their heirs will escape paying estate taxes.
19.
Property taxes are the most important source of income for local
governments.
20. A
person earning $20,000 a year pays the same percentage tax on income that
someone earning $100,000 a year does.
II. Multiple Choice. Select the best answer to each of the
following.
21. Which
of the following is not a part of the "underground
economy"?
a) pornography and
prostitution
b) illegal drugs
c) stolen goods
d) under the counter
transactions
e) all of these are and
cost us bigtime!
22. A
government's budget is a:
a) summary of the
money that it spent in previous years
b) statement of
expenditures and income that took place during the preceding year
c) plan of income and
expenses for the year to come
d) a law that prevents
the government from spending more than it earns
e) flexible plan that
expands as needed for public services
23. The
federal government's biggest expenditures in recent years has
been for:
a) income security c) crime prevention
b) pollution d) national defense
e) education
24.
Approximately what percentage of the GDP is accounted for by government
spending?
a) 5-10% c) 15-20%
b) 20-25% d) 40%
e) 50%
25. Which
of the following is an example of a transfer payment?
a) the army's purchase
of 100 new tanks
b) a salary increase
for postal workers
c) an allocation of
funds to pay for a new high school
d) a social security
payment to a retired person
e) Mrs. Rieffel's paycheck (no, wait, that's a
joke!)
26. The
largest item on state and local expenditures in recent years has been for:
a) income security c) crime prevention
b) externalities d) education
e)
highway
construction and maintenance
27. Which
of the following is the best example of a benefits-received tax?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
28. Which
of the following is the best example of an ability-to-pay
tax?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
29. Which
type of tax falls the heaviest on families with low
incomes?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
30. The
incidence of taxation refers to:
a) the size of the tax
b) the importance of
the tax
c) the group
responsible for collecting a particular tax
d) the group that
actually pays the tax
e) how often the tax is
collected
III. Matching. Match the following terms correctly. Duh!
31. = a)
deficit
32. - b) surplus
33. + c) balanced
More Matching. Match the following terms correctly.
34. tariff a) laissez-faire, invisible hand, and tax
criteria
35. excise b) decrease taxes and increase federal revenues
36. line item veto c) increases costs as products become finished
37. Laffer Curve d) locked up for tax
evasion, not crime
38. Adam
Smith e) legally subtracted
item/person
39. Value
Added Tax a) tax on manufactured goods
40. Al
"Scarface" Capone b) the Pres. the ability
to not allocate some $$$
41. exemption c) tax on imports
42. deduction d) non-taxable item, like a donation to charity
IV. Label the following correctly:
43-48. The Business Cycle
43. peak 46. expansion
44. trough 47. recession
45. depression 48. recovery
I
V. Short Answer.
Answer the following correctly within a sentence or two. ___ points needed;
maximum is ____.
49. (3 points) In your
opinion: What is a good tax?
50. (5) Give four reasons for taxes:
a)
b)
c)
d)
51. (5)
Name the three tax rates and explain how each differs from the others/example.
a) P
b) P
c) R
52. (5) What is a flat tax?
Give an advantage and a disadvantage of it.
53. (5) Give the four
criteria for evaluation of any tax, according to Adam Smith.
a)
b)
c)
d)
54. (5) Give four reasons
for the colossal increase in government expenditures.
a) b)
c) d)
55. (3) What led to the
tremendous increase in the size of government after 1930?
56. (4) Why
is having a huge national debt so bad?
a)
b)
c)
d)
57. (3) What is the
definition of Block Grants or Grants-in-aid and what is their purpose?
58. (3) Give three ways a
person can legally reduce his/her tax bill?
a)
b)
c)
59. (3) What do taxes have
to do with former President Bush and the phrase, "Read my lips!"
60. What is a tax rebate? Why did the Average
American get one recently? What is a tax
refund? Under what circumstances do you get a refund?
61. What is
a VAT tax? How will it increase tax
revenues in the
62. Give at
least two commonly voiced criticisms of public assistance:
a)
b)
63. Give at
least two alternatives/suggestions for corrections of the public
assistance/welfare system in
a)
b)
64. Name
three groups who are at special risk for Incidence of Poverty in
a)
b)
c)
65. (3) Three examples of Income
Security/income Maintenance programs
a)
b)
c)
66. (3) Three examples of
Labor Management strategies are:
a)
b)
c)
67. (2) In a Lorenz curve
what is the inequality, actually?
HONORS Economics JANUARY
QUARTERLY
SENIOR SOCIAL STUDIES
Government and Taxes
JANUARY 26, 2005
Mrs. Rieffel TIME: 50 MINUTES
I. True or
False. Mark a) to indicate True or b) to
indicate False for each of the following.
1. Since
the 1930s, government participation in the economy has grown dramatically.
2.
Inflation is one of the major causes of economic instability in the
3. National
defense and public assistance takes a huge chunk of change from the federal
budget.
4. A common
synonym for "outlays" would be "expenditures".
5. Social
security may be doomed since the birth rate is lower and the percentage of
elderly is living even longer.
6. Gasoline
taxes used for highway improvement is an example of a benefits-received tax.
7. Income
taxes automatically adjust to the state of the economy.
8. When
governments levy taxes, they are, in effect, redistributing the income of
taxpayers.
9. The
nearest thing that we have to a proportional tax in the
10. All
taxes are based on a percentage of personal income.
11. Taxes
may be levied to make it easier or more difficult for people to spend money.
12. All
taxpayers are required to fill out a long, complicated form listing deductions
from taxable income.
13. The
corporate income tax subjects the owners of corporations to pay exactly as if
the corporation was an ordinary individual.
14. The
sales tax is an example of a proportional tax.
15.
Politicians are attracted to excise taxes because people are often
unaware that they are paying them.
16.
Taxpayers may claim an exemption for each dependent.
17. A flat
tax would probably make income tax forms even more complex.
18. A gift
tax is to prevent wealthy people from giving away all of their property so that
their heirs will escape paying estate taxes.
19.
Property taxes are the most important source of income for local
governments.
20. A
person earning $20,000 a year pays the same percentage tax on income that
someone earning $100,000 a year does.
II. Multiple Choice. Select the best answer to each of the
following.
21. Which
of the following is not a part of the "underground
economy"?
a) pornography and
prostitution
b) illegal drugs
c) stolen goods
d) under the counter
transactions
e) all of these are and
cost us bigtime!
22. A
government's budget is a:
a) summary of the
money that it spent in previous years
b) statement of
expenditures and income that took place during the preceding year
c) plan of income and
expenses for the year to come
d) a law that prevents
the government from spending more than it earns
e) flexible plan that
expands as needed for public services
23. The
federal government's biggest expenditures in recent years has
been for:
a) income security c) crime prevention
b) pollution d) national defense
e) education
24.
Approximately what percentage of the GDP is accounted for by government
spending?
a) 5-10% c) 15-20%
b) 20-25% d) 40%
e) 50%
25. Which
of the following is an example of a transfer payment?
a) the army's purchase
of 100 new tanks
b) a salary increase
for postal workers
c) an allocation of
funds to pay for a new high school
d) a social security
payment to a retired person
e) Mrs. Rieffel's paycheck (no, wait, that's a
joke!)
26. The
largest item on state and local expenditures in recent years has been for:
a) income security c) crime prevention
b) externalities d) education
e) highway construction
and maintenance
27. Which
of the following is the best example of a benefits-received tax?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
28. Which
of the following is the best example of an ability-to-pay
tax?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
29. Which
type of tax falls the heaviest on families with low
incomes?
a) income tax c) sales tax
b) property tax d) bridge and highway tolls
e) excise tax
30. The
incidence of taxation refers to:
a) the size of the tax
b) the importance of
the tax
c) the group
responsible for collecting a particular tax
d) the group that
actually pays the tax
e) how often the tax is
collected
III. Matching. Match the following terms correctly. Duh!
31. = a)
deficit
32. - b) surplus
33. + c) balanced
IV. More Matching. Match the following terms correctly.
34. tariff a) laissez-faire, invisible hand, and tax
criteria
35. excise b) decrease taxes and increase federal revenues
36. line item veto c) increases costs as products become finished
37. Laffer Curve d) locked up for tax
evasion, not crime
38. Adam
Smith e) legally subtracted
item/person
39. Value
Added Tax a) tax on manufactured goods
40. Al
"Scarface" Capone b) the
Pres. the ability to not allocate some $$$
41. exemption c) tax on imports
42. deduction d) non-taxable item, like a donation to charity
I
V. Short Answer.
Answer the following correctly within a sentence or two. ___ points needed;
maximum is ____.
43. (3 points) In your
opinion: What is a good tax?
44. (5) Give four reasons for taxes:
a)
b)
c)
d)
45. (5)
Name the three tax rates and explain how each differs from the others/example.
a) P
b) P
c) R