Econ Problem Set 02

# Econ Problem Set 02 - Problem Set 02 Econ 103 Macroeconomic...

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Problem Set 02 page 1/8 Econ 103 – Macroeconomic Principles Fall 2010 Multiple-choice questions Identify the letter of the choice that best completes the statement or answers the question. Part I – Nominal vs. Real GDP 1. Suppose in 2000, nominal GDP in Xland was 1000 xubles and it increased to 2000 xubles in 2001. The base year is 2000 and the GDP deflator in 2001 is 200. Then of the 1000 xubles increase in nominal GDP, is an increase in real GDP a. none, or 0 xubles b. all, or 1000 xubles c. 500 xubles d. 2000 xubles e. 100 xubles 2. In Exhibit S-4, the base year is a. Year 1 b. Year 2 c. Year 3 d. Year 4 e. Year 5 3. In Exhibit S-4, the GDP deflator in Year 5 is a. 1 b. 95 c. 110 d. 105 e. 109 Answers Part I 1) A 2) C 3) D

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Problem Set 02 page 2/8 Econ 103 – Macroeconomic Principles Fall 2010 Part II – Taxes 4. A tax where wealthy people pay a larger percentage of their income than poor people is known as a(n) a. percentage tax b. unit tax c. proportional tax d. progressive tax e. regressive tax 5. Which of the following taxes is always regressive? a. a property tax b. an income tax c. a corporate tax on profit d. a 25 percent tax on overtime wages e. a \$2 tax on a ticket to the movies 6. If Elmer is taxed \$100 on an income of \$1,000, Tom is taxed \$180 on an income of \$2,000, and Maurice is taxed \$240 on an income of \$3,000, the tax system is a. progressive b. regressive c. proportional d. lump-sum (everybody pays the same amount of taxes) e. none of the above 7. If Larry is taxed \$100 on an income of \$1,000, Roy is taxed \$220 on an income of \$2,000, and Chris is taxed \$390 on an income of \$3,000, the tax system is a. progressive b. proportional c. regressive d. consumption based e. none of the above 8. In Exhibit DD-1, when income rises from \$1,000 to \$2,000, the tax a. rate is constant b. rate falls c. falls to zero d. rate rises to 100 percent e. rate rises
Problem Set 02 page 3/8 Econ 103 – Macroeconomic Principles Fall 2010 9. The tax system of Exhibit DD-1 is a. progressive b. proportional c. regressive d. based on a unit (specific) tax e. none of the above 10. Given the economy described by Exhibit DD-5, then most likely a. Meredith would prefer a progressive income tax system while Hillary would prefer a regressive income tax system b. Meredith and Hillary would both prefer a regressive income tax system

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Econ Problem Set 02 - Problem Set 02 Econ 103 Macroeconomic...

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