APEX Econ Unit 5

Why is taxation necessary?

To provide money for government programs

Why does the government need to collect taxes?

To ensure competition and protect consumers

The government must force people to pay taxes so that it can do what?

Make and enforce the laws necessary to make the free-market system work properly

A. Sales tax
B. Excise tax
C. Property tax

A. 7 percent charged on the purchase of all non-necessary goods B. $2 tax charged on each pack of cigarettes C. 1 percent charged on the value of all residential houses

A. Property tax
B. Personal income tax
C. Capital gains tax

A. 1 percent charged on the value of all residential houses B. 15 percent charged on all wages C. 5 percent charged on profits from selling stocks

A. Sales tax
B. Excise tax
C. Capital gains tax

A. 9 percent charged on all purchases of non-necessities B. $1 tax charged on each gallon of gas purchased C. 5 percent charged on profits from selling stocks

What does a progressive taxation system do?

It increases the tax rate as income rises.

What is a regressive tax?

A tax that charges more to those with lower incomes

What is the justification of the progressive taxation method?

The idea that taxation should be based on the ability-to-pay principle

The World Trade Organization was formed in order to accomplish what?

Promote free trade

Countries are better able to negotiate free-trade agreements because of the existence of the which of the following?

World Trade Organization

A trade agreement that creates favorable trade terms between two nations establishes which of the following?

Normal Trade Relations

Tariffs differ from taxes because tariffs are what?

Collected on imported goods

Taxes differ from tariffs because taxes are what?

Collected on domestic economic activity

Which of the following is true about tariffs?

They are paid on international trade only.

Sort the statements below into the correct order in which the federal budget is prepared

1. The president gives a proposed budget to Congress. 2. Congress decides on the details of the budget. 3. The president signs spending bills into law.

Sort the statements below into the correct order in which the federal budget is prepared.

1. The Office of Management and Budget (OMB) and the president prepare a proposed budget. 2. Congress decides on the overall level of spending and taxation and passes specific spending bills. 3. The president signs various spending bills into law.

Sort the statements below into the correct order in which the federal budget is prepared.

1. The president writes a preliminary budget proposal. 2. Congress decides on the details of the budget. 3. The president signs spending bills into law.

Politicians approve pork barrel spending for what purpose?

To win political support

Politicians can gain added support for themselves by approving what?

Pork barrel projects

Pork barrel projects are approved because they do what?

Help politicians win support from their constituents

Which of these has been a trend in the 20th century?

Growing levels of government spending

How can recent government spending be best described?

Constantly increasing

The 20th century has shown a trend toward greater what?

Government spending

A. Merit good
B. Public good
C. Individual good

A. Education B. School buildings C. Textbooks

A. Retirement programs
B. Infrastructure projects
C. Stock investments

A. Merit good B. Public good C. Individual good

A. Health care
B. Infrastructure projects
C. Stock investments

A. Merit good B. Public good C. Individual good

Government corporations can be described as which of the following?

Independently run

Government corporations can be described as which of the following?

Private sector companies

Government agencies are which of the following?

Part of the public sector

Which merit good does the U.S. government provide through a payroll tax?

Health care

Which merit good does the U.S. government provide through a payroll tax?

Retirement benefits

What merit good does the U.S. government pay for through the Medicaid payroll tax?

Health care

Why does the free-market system require government regulation?

Producers are driven by the profit motive to work against competition.

Government regulation of the free market is required in order to do what?

Ensure competition and protect consumers

The free-market system cannot exist without government regulation for what reason?

The profit motive undermines competition unless competition is protected.

What does predatory pricing involve?

A large company charging below its production cost in order to eliminate competition

What does price fixing involve?

A group of companies agreeing on a particular price to charge for their products

What does production limitation involve?

A cartel setting a maximum output for the good that all members sell

Consumer-protection regulations are beneficial because they lead to what?

A decrease in injuries and death

Consumer-protection regulations are beneficial because they increase what?

Consumer confidence

One drawback to consumer-protection regulations is that they lead to what?

Higher prices

Why do government regulations lead to higher prices for consumers?

The costs of compliance are passed on to the consumer

Why do government regulations lead to higher prices for consumers?

Producers pass along the costs of compliance.

What does complying with consumer-protection regulations do?

Increases production costs and raises prices

Consumer-protection regulations donot involve what?

Government censorship

Which of these isnot necessary for the enforcement of consumer-protection regulations?

Censorship

What is one thing the government must do to enforce consumer-protection regulations?

Test new products for safety and effectiveness

A. Consumers
B. Producers
C. Governments

A. Providing investment capital B. Paying wages C. Collecting taxes

A. Consumer
B. Producer
C. Government

A. Provide labor and investment B. Provide individual goods C. Provide public goods

A. Provide labor
B. Create goods and services
C. Protect competition

A. Consumers B. Producers C. Governments

What does the enforcement of antitrust laws do?

Speeds up the flow of capital and wages

What does increasing consumer confidence do?

Increases purchases from producers

What speeds up the flow of investment and wages in the circular flow of the free-market system?

Antitrust laws

Which of these is an example of a labor law?

A minimum-wage requirement

Which of these is an example of a land-use law?

A residential zoning ordinance

Which of these is an example of a trade restriction?

A tariff on imported cars

The government might enact a price ceiling in order to accomplish what?

Protect the poor

The government might enact a price floor in order to accomplish what?

Protect producers

The government can prevent the shortages that accompany price ceilings by doing what?

Rationing

What is the purpose of freezing someone's assets?

To reduce crime

What do banking regulations prohibit?

Money laundering

What do capital controls prevent?

Hasty movements of money into and out of a country's economic system

A. Land-use law
B. Labor law
C. Banking regulation

A. Limitation of two houses per acre in the residential section of a town B. Restriction of underage workers to 20 hours per week C. Requiring that 15 percent of assets be kept on hand in a vault

A. Price ceiling
B. Trade restriction
C. Labor law

A. Limiting the price of a gallon of gas to $2 B. Charging a 50 percent tariff on imported cotton C. Requiring that all workers be paid at least $5.15 per hour

A. Trade restriction
B. Labor law
C. Banking regulation

A. Charging a 70 percent tariff on imported steel B. Requiring unions to give 60 days notice before going on strike C. Requiring that money laundering be reported

Parental freedom is limited by laws requiring what?

Compulsory education

Censorship is a government-imposed limit on which of the following?

Individuals' freedom of expression

Environmental-protection laws limit what?

The exploitation of natural resources

Environmental-protection laws are good for the economy because they do what?

Safeguard resources needed for future production

The passage of environmental-protection laws results in what?

Higher prices

Environmental-protection laws can be bad for the economy because they may do what?

Increase unemployment

A. Taxation
B. Antitrust laws
C. Censorship

A. To collect revenue B. To protect competition C. To control the population

A. Tariffs
B. Anti-fraud laws
C. Environmental-protection laws

A. To protect domestic industry B. To guarantee free choice C. To safeguard natural resources

A. Subsidies
B. Labor laws
C. Antitrust laws

A. To protect domestic industry B. To protect workers C. To protect competition

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APEX Econ Unit 5

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Why is taxation necessary?

To provide money for government programs

Why does the government need to collect taxes?

To ensure competition and protect consumers

The government must force people to pay taxes so that it can do what?

Make and enforce the laws necessary to make the free-market system work properly

A. Sales tax
B. Excise tax
C. Property tax

A. 7 percent charged on the purchase of all non-necessary goods B. $2 tax charged on each pack of cigarettes C. 1 percent charged on the value of all residential houses

A. Property tax
B. Personal income tax
C. Capital gains tax

A. 1 percent charged on the value of all residential houses B. 15 percent charged on all wages C. 5 percent charged on profits from selling stocks

A. Sales tax
B. Excise tax
C. Capital gains tax

A. 9 percent charged on all purchases of non-necessities B. $1 tax charged on each gallon of gas purchased C. 5 percent charged on profits from selling stocks

What does a progressive taxation system do?

It increases the tax rate as income rises.

What is a regressive tax?

A tax that charges more to those with lower incomes

What is the justification of the progressive taxation method?

The idea that taxation should be based on the ability-to-pay principle

The World Trade Organization was formed in order to accomplish what?

Promote free trade

Countries are better able to negotiate free-trade agreements because of the existence of the which of the following?

World Trade Organization

A trade agreement that creates favorable trade terms between two nations establishes which of the following?

Normal Trade Relations

Tariffs differ from taxes because tariffs are what?

Collected on imported goods

Taxes differ from tariffs because taxes are what?

Collected on domestic economic activity

Which of the following is true about tariffs?

They are paid on international trade only.

Sort the statements below into the correct order in which the federal budget is prepared

1. The president gives a proposed budget to Congress. 2. Congress decides on the details of the budget. 3. The president signs spending bills into law.

Sort the statements below into the correct order in which the federal budget is prepared.

1. The Office of Management and Budget (OMB) and the president prepare a proposed budget. 2. Congress decides on the overall level of spending and taxation and passes specific spending bills. 3. The president signs various spending bills into law.

Sort the statements below into the correct order in which the federal budget is prepared.

1. The president writes a preliminary budget proposal. 2. Congress decides on the details of the budget. 3. The president signs spending bills into law.

Politicians approve pork barrel spending for what purpose?

To win political support

Politicians can gain added support for themselves by approving what?

Pork barrel projects

Pork barrel projects are approved because they do what?

Help politicians win support from their constituents

Which of these has been a trend in the 20th century?

Growing levels of government spending

How can recent government spending be best described?

Constantly increasing

The 20th century has shown a trend toward greater what?

Government spending

A. Merit good
B. Public good
C. Individual good

A. Education B. School buildings C. Textbooks

A. Retirement programs
B. Infrastructure projects
C. Stock investments

A. Merit good B. Public good C. Individual good

A. Health care
B. Infrastructure projects
C. Stock investments

A. Merit good B. Public good C. Individual good

Government corporations can be described as which of the following?

Independently run

Government corporations can be described as which of the following?

Private sector companies

Government agencies are which of the following?

Part of the public sector

Which merit good does the U.S. government provide through a payroll tax?

Health care

Which merit good does the U.S. government provide through a payroll tax?

Retirement benefits

What merit good does the U.S. government pay for through the Medicaid payroll tax?

Health care

Why does the free-market system require government regulation?

Producers are driven by the profit motive to work against competition.

Government regulation of the free market is required in order to do what?

Ensure competition and protect consumers

The free-market system cannot exist without government regulation for what reason?

The profit motive undermines competition unless competition is protected.

What does predatory pricing involve?

A large company charging below its production cost in order to eliminate competition

What does price fixing involve?

A group of companies agreeing on a particular price to charge for their products

What does production limitation involve?

A cartel setting a maximum output for the good that all members sell

Consumer-protection regulations are beneficial because they lead to what?

A decrease in injuries and death

Consumer-protection regulations are beneficial because they increase what?

Consumer confidence

One drawback to consumer-protection regulations is that they lead to what?

Higher prices

Why do government regulations lead to higher prices for consumers?

The costs of compliance are passed on to the consumer

Why do government regulations lead to higher prices for consumers?

Producers pass along the costs of compliance.

What does complying with consumer-protection regulations do?

Increases production costs and raises prices

Consumer-protection regulations donot involve what?

Government censorship

Which of these isnot necessary for the enforcement of consumer-protection regulations?

Censorship

What is one thing the government must do to enforce consumer-protection regulations?

Test new products for safety and effectiveness

A. Consumers
B. Producers
C. Governments

A. Providing investment capital B. Paying wages C. Collecting taxes

A. Consumer
B. Producer
C. Government

A. Provide labor and investment B. Provide individual goods C. Provide public goods

A. Provide labor
B. Create goods and services
C. Protect competition

A. Consumers B. Producers C. Governments

What does the enforcement of antitrust laws do?

Speeds up the flow of capital and wages

What does increasing consumer confidence do?

Increases purchases from producers

What speeds up the flow of investment and wages in the circular flow of the free-market system?

Antitrust laws

Which of these is an example of a labor law?

A minimum-wage requirement

Which of these is an example of a land-use law?

A residential zoning ordinance

Which of these is an example of a trade restriction?

A tariff on imported cars

The government might enact a price ceiling in order to accomplish what?

Protect the poor

The government might enact a price floor in order to accomplish what?

Protect producers

The government can prevent the shortages that accompany price ceilings by doing what?

Rationing

What is the purpose of freezing someone’s assets?

To reduce crime

What do banking regulations prohibit?

Money laundering

What do capital controls prevent?

Hasty movements of money into and out of a country’s economic system

A. Land-use law
B. Labor law
C. Banking regulation

A. Limitation of two houses per acre in the residential section of a town B. Restriction of underage workers to 20 hours per week C. Requiring that 15 percent of assets be kept on hand in a vault

A. Price ceiling
B. Trade restriction
C. Labor law

A. Limiting the price of a gallon of gas to $2 B. Charging a 50 percent tariff on imported cotton C. Requiring that all workers be paid at least $5.15 per hour

A. Trade restriction
B. Labor law
C. Banking regulation

A. Charging a 70 percent tariff on imported steel B. Requiring unions to give 60 days notice before going on strike C. Requiring that money laundering be reported

Parental freedom is limited by laws requiring what?

Compulsory education

Censorship is a government-imposed limit on which of the following?

Individuals’ freedom of expression

Environmental-protection laws limit what?

The exploitation of natural resources

Environmental-protection laws are good for the economy because they do what?

Safeguard resources needed for future production

The passage of environmental-protection laws results in what?

Higher prices

Environmental-protection laws can be bad for the economy because they may do what?

Increase unemployment

A. Taxation
B. Antitrust laws
C. Censorship

A. To collect revenue B. To protect competition C. To control the population

A. Tariffs
B. Anti-fraud laws
C. Environmental-protection laws

A. To protect domestic industry B. To guarantee free choice C. To safeguard natural resources

A. Subsidies
B. Labor laws
C. Antitrust laws

A. To protect domestic industry B. To protect workers C. To protect competition

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