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Introduction to Taxation, Government Spending, and Economic Development

A quiz covering the basics of taxation, government spending, and their impact on economic development.

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    Introduction to Taxation, Government Spending, and Economic Development Question Which of the following amendments to the U.S. Constitution legalized the income tax? Question 1 answers a. 12th Amendment b. 14th Amendment c. 16th Amendment d. 18th Amendment Answer: c. 16th Amendment Question 2 Which of the following is NOT one of the characteristics of a good tax? Question 2 answers a. simplicity b. efficiency c. equity d. reliability Answer: d. reliability Question 3 The federal income tax is which type of tax? Question 3 answers a. progressive b. regressive c. proportional d. atypical Answer: a. progressive Question 4 FICA taxes fund which of the following large government programs? Question 4 answers a. Social Security and Medicaid

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    b. Medicare and Medicaid c. Social Security and Medicare d. Medicaid and Worker's Compensation Answer: c. Social Security and Medicare Question 5 Except for interest on the national debt, most mandatory spending of the federal government is for which of the following? Question 5 answers a. endowment funds b. entitlements c. tariffs d. excise taxes Answer: b. entitlements Question 6 Which of the following is a major source of revenue for most state governments? Question 6 answers a. property taxes b. corporate income taxes c. sales taxes d. interest earnings Answer: c. sales taxes Question 7 Which of the following theories supported the notion that free markets regulate themselves and should not be interfered with by the government? Question 7 answers a. Keynesian b. Supply - side c. Classical d. Reaganomics Answer: c. Classical Question 8

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    Which of the following economists supported the notion that the government should initiate spending during depressions? Question 8 answers a. John Keynes b. Adam Smith c. David Ricardo d. John Malthus Answer: a. John Keynes Question 9 The poverty threshold is Question 9 answers a. the total income needed by a family to pay for needs and wants. b. the total amount of welfare dollars being given to a family. c. the total amount of taxes needed to support welfare programs. d. the income level below which income is insufficient to support a household. Answer: d. the income level below which income is insufficient to support a household Question 10 Which of the following is NOT a cause of poverty? Question 10 answers a. lack of education b. lack of government programs c. economic shifts d. shifts in family structure Answer: b. lack of government programs Question 11 Which country is the world's leading exporter of services? Question 11 answers a. The United States b. Great Britain c. Japan d. China Answer: a. The United States

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