Question

The earned income tax credit:

Select one:

a. all of the above.

b. has increased in recent years.

c. is available to low-income eligible working people.

d. is refundable.

Which tax brings in the greatest share of federal government tax revenue?

Select one:

a. tariffs

b. federal excise taxes

c. federal personal income tax

d. social security tax

Which of the following is a tool of expansionary fiscal policy?

Select one:

a. increased taxes.

b. increased government purchases of goods and services.

c. reduced transfers.

d. reduced regulations.

Which type of inflation can result from wage rates that cause production cost increases?

Select one:

a. none of the above.

b. profit-push inflation.

c. cost-push inflation.

d. demand-pull inflation.

Which of the following is true? Economic conservatives believe that the marketplace:

Select one:

a. is efficient.

b. provides incentives.

c. encourages economic growth.

d. all of the above.

Answer 1

Answer- 1) Correct answer is "a"

The Earned Income Tax was supposed to be a temporarily refundable tax credit for lower-income workers to offset the Social Security payroll tax and rising food and energy prices. The United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children.

Answer- 2) Correct answer is "C"

Federal personal income tax brings in the greatest share of federal government tax revenue. The individual income tax has been the largest single source of federal revenue since 1950, amounting to about 50 percent of the the total.

Answer-3) Correct answer is "B"

Increased government purchases of goods and services is a tool of expansionary fiscal policy. Increased government spending will result in increased aggregate demand, which then increases the real GDP, resulting an increase in price. This is known as expansionary fiscal policy.

Answer- 4) Correct answer is "C"

Cost push inflation can result from wage rates that cause production cost increases. Cost-push inflation is inflation caused by an increase in prices of inputs like labor, raw material, etc. The increased in price of factor of production lead to a decreased supply of these goods.

Answer- 5) Correct answer is "d"

Economic conservatives believe that the marketplace is efficient, provides incentives, encourages economic growth. Fiscal conservatism is a political and economic philosophy regarding fiscal policy and fiscal responsibility advocating low taxes, reduced government spending and minimal government debt. Free trade, deregulation of the economy, lower taxes and privatization are the defining qualities of fiscal conservatism.