ECON 248 UNIT 5 UPDATED ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS FULL
SOLUTION GRADED A+
◉ Which of these is an example of a payroll tax
A. Paycheck withholding
B. State sales tax
C. Road usage tac
D. Social Security Tax. Answer: D
◉ Which of these increases the price of a certain foreign-made goods
A. A sales tax
B. An excise tax
C. An income tax
D. An import tariff. Answer: D
◉ Which organization attempts to promote free trade around the
world?
A. The internal Revenue Service (IRS)
B. The world trade organization (WTO)
C. The securities and exchange commissions (SEC)
D. The federal reserve bank (FED). Answer: B
, ◉ What is the reasoning behind forcing people to pay taxes in a free-
market economy?
A. To enable the government to pursue the goals of equity and
security
B. To prevent foreign competitors from destroying essential domestic
industries
C. To control the money supply and manage economic growth
D. To proide revenues for government programs needed to protect the
free market. Answer: D
◉ What is the difference between an income tax and a payroll tax?
A. Income taxes are collected based on income while payroll taxes are
collected based on wealth
B. Income taxes are used for a wide variety of government activities
while payroll taxes pay for specific programs
C. Income taxes reduce the demand for harmful goods while payroll
taxes pay for specific programs
D. Income taxes increase the purchasing power of the government
while payroll taxes increase the purchasing power of workers.
Answer: B
◉ What is the principle that justifies a regressive tax?
A. The ability-to-pay principle
B. The principle of taxation without representation
C. The prinicple of diminishing marginal returns
QUESTIONS AND CORRECT ANSWERS FULL
SOLUTION GRADED A+
◉ Which of these is an example of a payroll tax
A. Paycheck withholding
B. State sales tax
C. Road usage tac
D. Social Security Tax. Answer: D
◉ Which of these increases the price of a certain foreign-made goods
A. A sales tax
B. An excise tax
C. An income tax
D. An import tariff. Answer: D
◉ Which organization attempts to promote free trade around the
world?
A. The internal Revenue Service (IRS)
B. The world trade organization (WTO)
C. The securities and exchange commissions (SEC)
D. The federal reserve bank (FED). Answer: B
, ◉ What is the reasoning behind forcing people to pay taxes in a free-
market economy?
A. To enable the government to pursue the goals of equity and
security
B. To prevent foreign competitors from destroying essential domestic
industries
C. To control the money supply and manage economic growth
D. To proide revenues for government programs needed to protect the
free market. Answer: D
◉ What is the difference between an income tax and a payroll tax?
A. Income taxes are collected based on income while payroll taxes are
collected based on wealth
B. Income taxes are used for a wide variety of government activities
while payroll taxes pay for specific programs
C. Income taxes reduce the demand for harmful goods while payroll
taxes pay for specific programs
D. Income taxes increase the purchasing power of the government
while payroll taxes increase the purchasing power of workers.
Answer: B
◉ What is the principle that justifies a regressive tax?
A. The ability-to-pay principle
B. The principle of taxation without representation
C. The prinicple of diminishing marginal returns
