Taxable Income Range Marginal Tax Rate $0 to $10,000 12% $10,001 to $24,500 18%
ID: 1206357 • Letter: T
Question
Taxable Income Range
Marginal Tax Rate
$0 to $10,000
12%
$10,001 to $24,500
18%
$24,501 to $68,000
27%
$68,001 and above
38%
The table shows the taxable income range and marginal tax rates for a single taxpayer in Oceania. There are no exemptions or deductions on personal income taxes in Oceania.
1. Refer to Table 20.1. The income tax paid by George, a single taxpayer with an income of $65,000, is
A.$11,100.
B.$14,745.
C.$15,345.
D.$17,550.
2.The table shows the taxable income range and marginal tax rates for a single taxpayer in Oceania. There are no exemptions or deductions on personal income taxes in Oceania.
Refer to Table 20.1. George is a single taxpayer with an income of $65,000. What is George's average tax rate?
A.19.00%
B.22.68%
C.23.61%
D.27%
3.Of the following countries, in which one was the true marginal tax rate faced by the typical worker lowest and the average number of hours worked per week highest from 1993 through 1996?
A.Italy
B.Canada
C.the United States
D.Germany
4.Unlike with Social Security taxes, there is no threshold on earnings beyond which the Medicare tax collection stops.
True
False
5.Which of the following expenditures is classified as a discretionary expenditure of the U.S. federal government?
A.food stamps
B.Social Security
C.federal employee pensions
D.student loans and grants
6.For the U.S. federal government, mandatory spending refers to
A.spending that is not subject to Congress's annual appropriations process.
B.spending on federal employee salaries.
C.spending that never changes in amount from year to year.
D.spending that must be authorized by Congress each year.
7.Based on the current state of revenue of the Social Security and Medicare programs, the government has two options for funding, which are
A.cutting payroll taxes or raising benefits.
B.cutting payroll taxes or cutting benefits.
C.raising payroll taxes or cutting benefits.
D.raising payroll taxes or raising benefits.
8.Which of the following would be classified as fiscal policy?
A.The Environmental Protection Agency enacts stricter air pollution regulations.
B.The Federal Reserve cuts interest rates to stimulate the economy.
C.The federal government cuts taxes to stimulate the economy.
D.States increase taxes to fund education.
9.Automatic stabilizers refer to
A.the money supply and interest rates that automatically increase or decrease along with the business cycle.
B.changes in the money supply or interest rates that are intended to achieve economic stability.
C.changes in federal taxes and purchases that are intended to influence economic activity.
D.government spending and taxes that automatically increase or decrease along with the business cycle.
10.The implementation lag for fiscal policy ________ it is for monetary policy.
A.can be much longer than
B.is usually the same as
C.is generally much shorter than
D.There is not an implementation lag for fiscal policy.
11.When government decides to increase spending, interest rates generally ________ and this change in interest rates ________ investment spending.
A.decrease; increases
B.increase; decreases
C.decrease; decreases
D.increase; increases
12.The marginal propensity to consume is the proportion of each new dollar's worth of income that is spent.
True
False
Taxable Income Range
Marginal Tax Rate
$0 to $10,000
12%
$10,001 to $24,500
18%
$24,501 to $68,000
27%
$68,001 and above
38%
Explanation / Answer
1. D.$17,550
Tax = $ 65,000 X 0.27 = $ 17,550
2. D.27%
Average tax rate = Total tax paid / Total income X 100
Average tax rate = 17550/65000 X 100 = 0.27 = 27%
5. A.food stamps
6. C.spending that never changes in amount from year to year.
7. C.raising payroll taxes or cutting benefits.
8. C.The federal government cuts taxes to stimulate the economy.
Fiscal policy is the policy related to taxation and government spending.
9. D.government spending and taxes that automatically increase or decrease along with the business cycle.
10. A.can be much longer than
11. B.increase; decreases
12. True
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