8 - Chapter 8 Applications: The Costs of Taxation MULTIPLE...

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Chapter 8 Applications: The Costs of Taxation MULTIPLE CHOICE 1 . In 1776, the American Revolution was sparked by anger over a. the extravagant lifestyle of British royalty. b. the crimes of British soldiers stationed in the American Colonies. c. British taxes imposed on the American Colonies. d. the failure of the British to protect American Colonists from attack by hostile Native Americans. 2 . In 1776, the American Revolution was sparked by a. the lack of religious freedom in America. b. anger over British taxes. c. Britain’s attempt to control American trade. d. a select few who craved political power. 3 . When Ronald Reagan ran for the office of President of the United States, he promised that, if elected, he would work for a. increased taxes on gasoline. b. reduced state sales tax rates. c. reduced Federal sales tax rates. d. reduced Federal income tax rates. 4 . During Ronald Reagan’s eight years in office a. income tax rates rose. b. income tax rates fell. c. he said, “Read my lips: no new taxes.” d. the tax rate of high-income taxpayers rose, while the tax rates of low income taxpayers fell. 5 . During Ronald Reagan’s terms in office, the top tax rate fell from a. 70 percent to 28 percent. b. 50 percent to 28 percent. c. 36 percent to 15 percent. d. 50 percent to 15 percent. 6 . To fully understand how taxes affect economic well-being, we must a. assume that economic well-being is not affected if all tax revenue is spent on goods and services for the American public. b. know the dollar amount of all taxes raised in the country each year. c. compare the reduced welfare of buyers and sellers to the amount of government revenue raised. d. compare the expenditures of the 50 state governments with that of the federal government. 7 . To analyze economic well-being in an economy it is necessary to use a. demand and supply. b. producer and consumer surplus. c. government spending and tax revenue. d. equilibrium price and quantity. 8 . When a tax is levied on a good a. only the quantity of the good sold will change. b. only the price of the good sold will change. c. both price and quantity of the good sold will change. d. neither price nor quantity of the good sold will change.
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9 . A tax on a good a. raises the price buyers pay and lowers the price sellers receive. b. raises both the price buyers pay and the price sellers receive. c.
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This note was uploaded on 07/23/2009 for the course BUS BUS217 – taught by Professor Staff during the Spring '09 term at California Baptist University.

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8 - Chapter 8 Applications: The Costs of Taxation MULTIPLE...

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