Question

Assume the government has a balanced budget and that the economy is experiencing a period of growth higher than predicted, tax receipts (collected) by the government are likely to

A) increase and result in a budget deficit.

B) decrease and result in a budget deficit.

C) increase and result in a budget surplus.

In 2016, the federal government spent $200 billion but collected $180 billion in taxes, therefore in 2016, the government accumulated

A) a budget surplus of $20 billion.

B) a federal debt of $666 billion.

C) a budget deficit of $20 billion.

An example of a progressive tax would be

A) a Social Security tax rate of 5% on earned income below $100,000 and 0% on income earned above $100,000.

B) the Medicare payroll tax of 2.9% of income for everyone, regardless of how much they earn.

C) an income tax with a 10% tax rate on low income households and 20-30% tax rates on higher income households.

If you were to identify one of the main differences between a bank and a credit union, what would it be?

A) A bank is owned and run by its members.

B) A credit union has to be FDIC insured, but not banks.

C) A credit union is owned and run by its members.

Answer 1