Question 1

A) Which type of tax is applied uniformly so that lower-income individuals are paying a higher percentage of their earnings on the tax compared to high-wage individuals?(1 point)

progressive tax

progressive tax

payroll tax

payroll tax

proportional tax

proportional tax

regressive tax

regressive tax

Question 2

A) Which statement best describes how property tax is collected?(1 point)

Property tax is a progressive tax paid to the federal government based on the assessed value of the property being taxed.

Property tax is a progressive tax paid to the federal government based on the assessed value of the property being taxed.

Property tax is a proportional tax paid to a state government based on the market value of the property being taxed.

Property tax is a proportional tax paid to a state government based on the market value of the property being taxed.

Property tax is a flat fee each property owner pays to a local government each year.

Property tax is a flat fee each property owner pays to a local government each year.

Property tax is a proportional tax paid to a local government based on the assessed value of the property being taxed.

Property tax is a proportional tax paid to a local government based on the assessed value of the property being taxed.

Question 3

A) How does the amount of interest on the national debt vary each year?(1 point)

Changes in the amount of debt and the interest rate on the debt

Changes in the amount of debt and the interest rate on the debt

Changes in the term of the debt and the amount left over from mandatory spending

Changes in the term of the debt and the amount left over from mandatory spending

Changes in the interest rate on the debt and the amount remaining from discretionary spending

Changes in the interest rate on the debt and the amount remaining from discretionary spending

Changes in the amount of debt and the buyer of the debt

Changes in the amount of debt and the buyer of the debt

Question 4

A) Explain whether state and federal governments have the same priorities in their budgets.(1 point)

Yes, because the state governments generally spend about the same percentage on education and public welfare as local governments.

Yes, because the state governments generally spend about the same percentage on education and public welfare as local governments.

No, because state governments spend a lower percentage of their budget on highways, roads, and higher education than local governments.

No, because state governments spend a lower percentage of their budget on highways, roads, and higher education than local governments.

No, because state governmentsspend a greater percentage of their budget on elementary and secondary education than local governments.

No, because state governmentsspend a greater percentage of their budget on elementary and secondary education than local governments.

No, because state governments spend a greater percentage of their budget on public welfare and higher education than local governments.

No, because state governments spend a greater percentage of their budget on public welfare and higher education than local governments.

Question 5

A) The federal government recently increased funding for infrastructure projects and Social Security benefits while reducing individual income tax rates. Explain the fiscal policy being used in this situation.(1 point)

A contractionary fiscal policy is being used because the decrease in tax rates decrease consumer spending and increased government spending slows down economic growth and inflation.

A contractionary fiscal policy is being used because the decrease in tax rates decrease consumer spending and increased government spending slows down economic growth and inflation.

A contractionary fiscal policy is being used because a decrease in tax rates decrease consumer spending and increased government spending slows down economic growth and inflation.

A contractionary fiscal policy is being used because a decrease in tax rates decrease consumer spending and increased government spending slows down economic growth and inflation.

An expansionary fiscal policy is being used because the decrease in tax rates increase consumer spending and increased government spending helps stimulate the economy.

An expansionary fiscal policy is being used because the decrease in tax rates increase consumer spending and increased government spending helps stimulate the economy.

An expansionary fiscal policy is being used because the decrease in tax rates decrease consumer and business spending and increase in government spending helps stimulate the economy.

An expansionary fiscal policy is being used because the decrease in tax rates decrease consumer and business spending and increase in government spending helps stimulate the economy.

Question 6

A) Which economic measuresare influenced byfiscal policy?(1 point)

income distribution and inflation

income distribution and inflation

employment and economic growth

employment and economic growth

poverty threshold and inflation

poverty threshold and inflation

aggregate supply and economic growth

aggregate supply and economic growth

Question 7

A) How does a deficit compare to a surplus in the federal government's budget?(1 point)

A deficit is when the total expenses is greater than the total revenues. A surplus is whenthe total revenues is greater than the total expenses.

A deficit is when the total expenses is greater than the total revenues. A surplus is whenthe total revenues is greater than the total expenses.

A deficit is when the total revenues is greater than the totalexpenses. Asurplus is whenthe total revenues is equal to the total expenses.

A deficit is when the total revenues is greater than the totalexpenses. Asurplus is whenthe total revenues is equal to the total expenses.

A deficit is when the total expenses is greater than the total revenues. A surplus is whenthe total revenues is equal to the total expenses.

A deficit is when the total expenses is greater than the total revenues. A surplus is whenthe total revenues is equal to the total expenses.

A deficit is when the total expenses is equal to the total revenues. A surplus is whenthe total revenues is greater than the total expenses.

A deficit is when the total expenses is equal to the total revenues. A surplus is whenthe total revenues is greater than the total expenses.

Question 8

A) What are the results from a steady decrease in the national debt?(1 point)

The amount spent on interest on the national debt decreases, allowing more to be spent on social programs.

The amount spent on interest on the national debt decreases, allowing more to be spent on social programs.

The amount spent on interest on the national debt increases from an increase in the interest rates on the national debt.

The amount spent on interest on the national debt increases from an increase in the interest rates on the national debt.

The number of investors decreases as there is increased doubt in the government's ability to repay the debt.

The number of investors decreases as there is increased doubt in the government's ability to repay the debt.

There is increased economic growth from a cut in tax rates for individual income and corporate income taxes.

There is increased economic growth from a cut in tax rates for individual income and corporate income taxes.

Question 9

A) Who sets the reserve requirements for banks that are members of the Federal Reserve?(1 point)

Federal Open Market Committee

Federal Open Market Committee

the Secretary of the Treasury

the Secretary of the Treasury

Board of Governors

Board of Governors

Federal Reserve district banks

Federal Reserve district banks

Question 10

A) What is the greatest anticipation of the Federal Open Market Committee meetings?(1 point)

The decision regarding the target federal funds rate.

The decision regarding the target federal funds rate.

The decision regarding the purchase of securities.

The decision regarding the purchase of securities.

The report on the open market operations that were conducted.

The report on the open market operations that were conducted.

The decision regarding the prime rate.

The decision regarding the prime rate.

Question 11

A) Infer why a bank enters into a repurchase agreement with the Federal Reserve.(1 point)

The bank can sell the repurchase agreement back to the Federal Reserve at a higher price.

The bank can sell the repurchase agreement back to the Federal Reserve at a higher price.

The bank requires a long-term loan from the Federal Reserve to help with operations.

The bank requires a long-term loan from the Federal Reserve to help with operations.

The bank needs a short-term inflow of cash to increase its reserves and liquidity.

The bank needs a short-term inflow of cash to increase its reserves and liquidity.

The bank wants to reduce their long-term liabilities.

The bank wants to reduce their long-term liabilities.

Question 12

A) Describe how changes to the money supply affect the bank's ability to lend to customers.(1 point)

A decrease in the money supply decreases the ability for assets and securities to be turned to cash.The liquidity in the markets decreases as a result and the bank has less ability to lend.

A decrease in the money supply decreases the ability for assets and securities to be turned to cash.The liquidity in the markets decreases as a result and the bank has less ability to lend.

An increase in the money supply decreases the ability for assets to be sold for securities. The liquidity in the markets decreases as a result and banks have less ability to lend.

An increase in the money supply decreases the ability for assets to be sold for securities. The liquidity in the markets decreases as a result and banks have less ability to lend.

A decrease in the money supply increases the ability for assets and securities to be turned to cash. The liquidity in the markets increases as a result and the bank's ability to lend increases.

A decrease in the money supply increases the ability for assets and securities to be turned to cash. The liquidity in the markets increases as a result and the bank's ability to lend increases.

An increase in the money supply increases the ability for securities to be sold to other banks for other assets. The liquidity in the markets increases as a result and banks have more ability to lend.

An increase in the money supply increases the ability for securities to be sold to other banks for other assets. The liquidity in the markets increases as a result and banks have more ability to lend.