Question 1

Over the period since 1960, government expenditures, as a percentage of GDP, have

A. fallen steadily through the period.

B. held constant through the period.

C. fallen sharply and then rose sharply toward the end of the period.

D. grown consistently through the period.

E. grown at the start of the period, fell and then rose again at the end of this period.

Question 4

Since 1960, government receipts, as a percentage of GDP, have

A. been declining steadily over the entire period.

B. reached a high in the 1960's and began declining since then

C. varied dramatically over the period, rising sharply in the 1960's and falling sharply since the 1990's.

D. been rising slowly over the period, rising from 25% in the 1960's and climbing up to 30% since the 1990's.

E. declined dramatically in the 1960's and 1970's, only to rise slowly since that period.

Question 5

Suppose there are two individuals who each earn $25,000 per year. One individual pays $2,500 in taxes and the other pays $2,000. This is a violation of

A. the benefits received principle.

B. the ability to pay principle.

C. vertical equity.

D. horizontal equity.

E. none of the above.

Question 7

In the US, major sources of tax revenues are:

A. Income taxes at the federal level, property taxes at the state level.

B. Sales taxes at the federal level and income taxes and property taxes at the state level.

C. Income taxes at the federal level and income and sales taxes at the state level.

D. Income taxes at the federal level and payroll taxes at the state level.

Question 8

The federal government lowered tax rates in

A. 1986 and 2001.

B. 1986.

C. 2001.

D. neither year.

E. 1909 and has raised them ever since.

Question 9

The federal deficit was increased in 2002 as a result of

A. the 2001 recession.

B. the war on terrorism.

C. the 2001 tax cut.

D. increased defense spending.

E. all of the above.