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

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Unformatted text preview: 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. ANSWER: c. British taxes imposed on the American Colonies. TYPE: M SECTION: 0 DIFFICULTY: 2 2. In 1776, the American Revolution was sparked by a. the lack of religious freedom in America. b. anger over British taxes. c. Britains attempt to control American trade. d. a select few who craved political power. ANSWER: b. anger over British taxes. TYPE: M SECTION: 0 DIFFICULTY: 2 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. ANSWER: d. reduced Federal income tax rates. TYPE: M SECTION: 0 DIFFICULTY: 2 4. During Ronald Reagans 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. ANSWER: b. income tax rates fell. TYPE: M SECTION: 0 DIFFICULTY: 2 5. During Ronald Reagans 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. ANSWER: a. 70 percent to 28 percent. TYPE: M SECTION: 0 DIFFICULTY: 1 219 Chapter 8/Applications: The Costs of Taxation 220 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. ANSWER: c. compare the reduced welfare of buyers and sellers to the amount of government revenue raised. TYPE: M SECTION: 1 DIFFICULTY: 2 7. To analyze economic well-being in an economy it is necessary to use a. demand and supply....
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chapter 8 - Chapter 8 Applications: The Costs of Taxation...

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