Question 1

If Montana's governor reports a budget deficit in 2018, that state government likely:

received more in taxes than it spent in 2018.

spent more money than it received in taxes in 2018.

equalized spending and taxes in 2018.

took in larger tax funds than it needed for providing services to state residents.

Question 2

A _____ policy will cause a lesser share of income to be collected from those with high incomes than from those with lower incomes.

excise tax

regressive tax

proportional tax

progressive tax

Question 3

A progressive tax is calculated as _____ percentage of income earned.

a decreasing

an unquantifiable

an increasing

a flat

Question 4

If government tax policy requires John to pay $40,000 in tax on annual income of $400,000 and Mark to pay $15,000 in tax on annual income of $99,000, then the tax policy is _____.

expressive

proportional

regressive

progressive

Question 5

The government can use _____ in the form of _____ to decrease the level of aggregate demand in the economy.

a contractionary fiscal policy; a decrease in government spending

an expansionary fiscal policy; an increase in government spending

a contractionary fiscal policy; a reduction in taxes

an expansionary fiscal policy; an increase in corporate taxes

Question 6

Question 71 pts

If an economy moves into an expansion, causing that country to produce more than potential GDP, then:

automatic stabilizers will cause tax revenue to decrease and government spending to increase.

automatic stabilizers will cause tax revenue to increase and government spending to decrease.

tax revenue and government spending will both be lower because of automatic stabilizers.

tax revenue and government spending will both be higher because of automatic stabilizers.

Question 7

If a country's economic data shows private savings of $400 million, government spending of $56 million, tax revenue of $100 million, and a trade surplus of $48 million, then what does investment equal?

$196 million

$492 million

$404 million

$400 million

Question 8

If a country's economic data shows that private savings equal $565 million, government spending equals $214 million, taxes equal $213 million, and the trade surplus equals $128 million, then what does investment equal?

$694 million

$10 million

$692 million

$12 million