Page 1

ECO 450 Week 11 Final Exam Part 2


Question 1 Most empirical research indicates that the market supply curve of labor hours by prime-age males is: Answer Question 2 The higher the compensated elasticity of supply of savings, Answer Question 3 If the return to savings, r, is subject to taxation at rate t, then in equilibrium a saver’s marginal rate of time preference will equal: Answer Question 4 The Haig-Simons definition of income: Answer Question 5 Comprehensive income: Answer Question 6 Which of the following is the result of The Economic Growth and Tax Relief Reconciliation Act enacted in 2001? Answer Question 7 The reduction in marginal tax rates will: Answer Question 8 Which of the following is true for the federal income tax in the United States? Answer Question 9 The excess burden of tax preferences: Answer Question 10 Tax expenditures are: Answer Question 11 Accelerated depreciation allows corporations to: Answer Question 12 In the long run a corporate income tax that initially reduces the return to investment in the corporate sector will also: Answer Question 13

If corporations maximize profits, the short-run incidence of a tax on its profits will be borne by: Answer Question 14 If an all-equity firm has after-tax income of $100,000 based on a 34% income tax, what is the after-tax income of an equivalent firm that pays $15,000 in interest that is tax deductible? Answer Question 15 If the supply of savings is not perfectly elastic, the corporate income tax is likely to: Answer Question 16 Assuming that a person never receives any cash gifts or bequests, a tax on comprehensive consumption is equivalent to a(n): Answer Question 17 In most states, the retail sales tax can be regarded as equivalent to a: Answer Question 18 Consumption-in-kind: Answer Question 19 A consumption-type, value-added tax: Answer Question 20 The differential incidence of substituting a tax on comprehensive consumption for a tax on comprehensive income is likely to be: Answer Question 21 If a tax on real estate results in a decrease in the supply of housing, the tax will be: Answer Question 22 A comprehensive wealth tax will: Answer Question 23 If the annual amount of savings is $10 billion, what is the effect of a wealth tax assuming supply is responsive? Answer Question 24 If the annual amount of savings is $10 billion, what is the effect of a wealth tax assuming supply is perfectly inelastic? Answer Question 25 A comprehensive wealth tax base includes: Answer Question 26 What is generally the best measure of fiscal capacity for local governments? Answer Question 27

In general, local tax bases tend to be: Answer Question 28 Under a federal system of government, Answer Question 29 A federal highway grant will provide funds for roads supplied by state and local governments if these governments pay 50 percent of the cost of the roads. This grant is an example of: Answer Question 30 A grant received by a local government will: Answer

Eco 450 week 11 final exam part 2