ECON 214 quiz 8 solutions complete answers

ECON 214 quiz 8 solutions complete answers 

 

A marginal tax rate is:

 

Which of the following is considered mandatory government spending?

 

The most relevant tax rate for making decisions about earning additional income is the:

 

In recent years, the growth in foreign-owned debt has:

 

What would happen if a country defaulted on its sovereign debt?

 

Why do Social Security and Medicare pose problems for the federal government budget?

 

 A budget is:

           

Should average citizens be concerned with the government’s budget?

           

 Today, total annual government outlays in the United States are:

           

Between 2000 and 2010, real government outlays in the United States grew:

           

The largest portion of the federal budget is dedicated to:

           

 Which federal budget category’s portion of total government outlays has decreased since 1960?

           

Transfer payments refer to funds that are transferred from one group in society to another group:

           

Mandatory outlays are different than discretionary outlays because:

           

Why are interest payments considered mandatory spending in the federal budget?

           

Mandatory outlays:

           

Which of the following is considered discretionary government spending?

           

Assuming all of the following are in your personal monthly budget, your _____________ payment is considered a discretionary outlay.

           

_____________ would be considered a mandatory outlay in your monthly budget.

           

Discretionary government spending includes payments made for:

           

Due to ____________, government outlays have risen quickly since 2000.

           

____________ a government-administered retirement program.

           

When Social Security was first instituted by President Franklin Roosevelt in 1935, the payroll tax rate on wages used to fund the program was:

           

 ____________ a mandated federal program that funds health care for retired persons.

           

The funds used for payments to Medicare recipients come primarily from:

           

The number of workers per Social Security beneficiary in 1960 was approximately:

           

Over the next 20 years, the number of workers per Social Security beneficiary is predicted to be:

           

Social Security and Medicare spending continue to grow and take up larger shares of the federal budget because:

           

Are demographics an important factor when planning the federal budget?

           

One proposed solution to the funding problems faced by Social Security and Medicare is to implement means-testing, so that only those with limited retirement funds would qualify for the government benefits. An unintended consequence of such a requirement may be:

           

One proposed solution to the funding problems faced by Social Security and Medicare is to increase the retirement age from 67 to 70. Although this would mean billions of dollars in savings for these federal programs, an unintended consequence may be:

           

Some proponents of entitlement-program reform suggest indexing Social Security benefits to the consumer price index (CPI):

           

Reforming entitlement programs is difficult because:

           

Federal government spending has grown quickly since 2007 primarily because of:

           

Which of the following is not a revenue source for the U.S. federal government?

           

In 2012, revenue from corporate income taxes totaled approximately:

           

Excise taxes are levied on:

           

 Social Security and Medicare are funded by the collection of:

           

The largest source of tax revenue for the government is:

           

Which of the following is an example of something that contains an excise tax?

           

The government withdraws social insurance taxes from the paychecks of workers to:

           

The total current tax rate for Social Security and Medicare is:

           

The current tax rate for Social Security is:

           

Some people argue that social insurance taxes should be increased to remedy the fiscal problems faced by Social Security. What is a potential problem with this proposed solution?

           

Payroll taxes:

           

Some people argue that social insurance taxes should be increased to remedy the fiscal problems faced by Social Security. What is a potential unintended consequence of this proposed solution?

           

Suppose you return to college and earn an MBA, after which you get an upper-management position with Yum! Brands. If the tax rates are the same as in 2012 and your starting salary is $125,000, how much will you owe in federal social insurance taxes?

           

Suppose you return to college and earn an MBA, after which you get an upper-management position with Yum! Brands. If your starting salary is $125,000, and the percentages are the same as they were in 2012, how much will you owe in Social Security taxes?

           

Suppose you land a job with Google right out of college. Your economics training is very valuable to them, so you receive a starting annual salary of $65,000. What is the total amount of social insurance taxes you will be responsible for after your first year of work?

           

 Suppose you use your entrepreneurial spirit and economics training to start your own business. In your first year of work, you are able to earn $58,000 in gross income. What is the total amount of social insurance taxes you owe the federal government?

           

The United States has a:

           

A progressive income tax system is one in which:

           

If policymakers are concerned about the unequal distribution of income within society, then they should prefer a:

           

Suppose you graduate with an accounting degree and then become a certified public accountant. You work for a big firm, but are offered a chance to prepare tax documents for your city government as an independent contractor. The city offers to pay you a consulting fee of $10,000. When deciding whether to accept the additional work, the most important tax factor in your decision is:

           

Typically, the average tax rate for a person is ____________ their marginal tax rate, because ____________.

           

Suppose you are offered a $5,000 raise at work. Your current income tax rate is 25%. Your marginal income tax rate is 28%. Your average tax rate is 20%. The additional income tax you owe to the federal government (assuming you stay in the same rate bracket) if you accept the job will be:

           

Suppose you are offered a job with Amazon upon graduation. Your starting salary will be $70,000, which will put you in the 25% federal income tax bracket. The total amount of income taxes you pay is $13,530. Your average tax rate is approximately:

           

According to the U.S. Federal Tax Rates chart from the textbook (Figure 15.6), a person earning $100,000 in a given year is in the 28% tax bracket. How much will this individual owe in taxes for that year?

           

Using the table, what is the total federal income tax bill for someone who makes $67,000 per year?

           

Using the table, what is the average tax rate for someone who makes $67,000 per year?

           

Using the table, what is the marginal income tax rate for someone who makes $67,000 per year?

           

Using the table, what is the total payroll tax bill (assume zero state and local income taxes) for someone who makes $67,000 per year?

           

Using the table, what is the marginal income tax rate of a $5,000 raise for someone who currently makes $67,000 per year?

           

Using the table, what is the marginal income tax rate of a $5,000 raise for someone who currently makes $85,650 per year?

           

Using the table, what is the new average tax rate for a person who currently makes $80,000 per year and receives a $10,000 raise?

           

The U.S. federal income tax began in:

           

The highest marginal tax rate in 1913 was:

           

By 1918, the top marginal income tax rate in the United States rose to:

           

The highest marginal tax rate in U.S. history was:

           

The top 1% of households in the United States:

           

Why do wealthy citizens contribute much more tax revenues to the government than poor citizens?

           

The wealthiest 20% of households in the United States:

           

The poorest 40% of households in the United States:

           

The middle 20% of households in the United States:

           

A U.S. federal government budget deficit occurs when:

           

A U.S. federal government budget surplus occurs when:

           

 The most recent federal budget surplus occurred:

           

During the Great Recession, government outlays were _________ and government revenues were _________ their long-run averages over the period 1960–2012.

           

What is the most appropriate way to compare budget deficits/surpluses across time?

           

If government revenues in 2011 were $2.2 trillion and government outlays were $3.8 trillion:

           

Why did tax revenues fall so sharply after 2007?

           

Budget deficits tend to:

           

The U.S. government could reduce its budget deficit by:

           

Why is a budget surplus not necessarily a good thing?

           

Why is a budget deficit not necessarily a bad thing?

           

Budget deficits tend to:

           

Which of the following might be a good reason for running a budget deficit?

           

 If government revenues in 2011 were $2.2 trillion and government outlays were $3.8 trillion:

           

The federal budget deficit has grown so quickly in the past 5–10 years because of:

           

If government revenues in 2000 were $2.0 trillion and government outlays were $1.8 trillion, this means that:

           

The federal government started running a budget surplus in 1998. By 2002, the budget surplus had turned into a budget deficit. Why do you think the budget deficit returned in 2002?

           

According to the textbook, the country with the highest debt-to-GDP (gross domestic product) ratio in the world, in terms of publicly held debt, is:

           

 Should we be concerned about a growing federal debt?

           

Why does the federal debt tend to increase during periods of recession?

           

According to the table, the country with the highest average yearly budget deficit over the time period is:

           

According to the table, the country with the lowest average yearly budget deficit over the time period is:

           

According to the table, the country with the highest average yearly budget deficit over the time period as a percentage of the yearly increase in GDP is:

           

According to the table, the country with the lowest average yearly budget deficit over the time period as a percentage of the yearly increase in GDP is:

           

According to the table, the country with the largest increase in the debt-to-GDP ratio over the time period is:

           

 According to the table, the country with the largest decrease in the debt-to-GDP ratio over the time period is:

           

According to the table, which country appeared to be in the worst fiscal shape in 2012?

           

According to the table, which country appeared to be in the best fiscal shape in 2012?

           

Which country faces the most severe fiscal challenges—in terms of debt-to-GDP ratio—according to the accompanying table?

 

The austerity measures imposed on Greece in 2011:

           

Why was the world so concerned about Greece defaulting on its debt?

           

Why is foreign government ownership of U.S. debt not currently a huge concern among many economists?

           

Which country holds the most U.S. debt?