Course Public Finance
Test Final Exam Part 1

Instructions This final exam consist of 30 multiple choice questions and covers the material in Chapters 8 through 12. There are six questions from each Chapter.

A worker earns \$2,000 per month before taxes. He pays \$140 per month payroll tax on those wages. In addition, the income taxes on those wages are \$360 per month. On retirement, the worker receives a Social Security pension of \$750 per month. Which of the following statements is true?

The Social Security Act was implemented in the United States in:

The gross replacement rate:

Social Security tax rates can be reduced if:

The Social Security retirement system:

The induced-retirement effect of the Social Security pension system induces workers to:

Which of the following is true about the Medicare program in the United States?

The percent of total health care costs in the United States paid for by governments is approximately:

The government program that provides the health insurance to the poor in the United States is called:

Under national health insurance as operated in Great Britain:

Most of the medical bills of Americans in the United States are paid by:

What is the moral hazard associated with third party payment for health services?

A proportional income tax has an average tax rate that:

A tax on real estate is a:

If the average tax rate under a progressive tax rate structure is 35%, a possible marginal tax rate is:

A 5-percent retail sales tax on all consumer purchases in a state is imposed. The sales tax is:

Taxes:

Which of the following countries has the highest average tax rate relative to GDP?

The efficiency-loss ratio relative to tax is:

If a lump-sum tax is imposed, the slope of the new budget line relative to the budget line prior to the tax:

Viewed from origin a price distorting tax creates a new budget line with a ______ slope relative to the budget line without the tax.

A \$0.30 per unit tax is imposed on a good that reduces the quantity supplied and demanded by 1000 units. What is the deadweight loss (ignore price elasticities)?

Other things being equal, the more inelastic the demand for a taxed good:

The supply of new cars is perfectly elastic. A \$400 per car tax is levied on buyers. As a result of the tax,

The federal government, its agencies, and the Federal Reserve System:

The National Income and Product Accounts budget balance reflects:

The total dollar value of the federal debt outstanding is:

The debt of state and local governments is mostly:

If the federal government runs a surplus consistently, then which of the following is likely to occur?

An increase in government borrowing has no effect on the willingness of citizens to save or on the demand for credit. Increased borrowing to cover deficits will therefore: