AnswersSHS Lifetime Fitness - 2021Unit Test

Unit Test — Unit test Answers

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Which best describes a regressive tax?

A
a tax that charges low-income earners a lower percentage than high-income earners
B
a tax that charges an equal percentage to all
C
a tax that charges earners based on their professions
D
a tax that charges high-income earners a lower percentage than low-income earners
2
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When a government decides to limit the number of goods that can be sold to another nation, that government is creating

A
monetary policy.
B
trade policy.
C
fiscal policy.
D
regulatory policy.
3

Which best describes why governments collect taxes?

A
to control the value of currency
B
to keep the government running
C
to ensure surplus funds
D
to fund government programs
4

Which body manages the Fed?

A
the Appropriations Committee
B
the Federal Reserve Board
C
the Federal Open Markets Committee
D
the Economic Policy Subcommittee
5

The government of Country C has passed a law protecting the physical safety of factory workers. This is an example of

A
monetary policy.
B
supply and demand.
C
fiscal policy.
D
regulatory policy.
6

Which of the following are taxes on income or wealth that individuals pay in the United States? Select three options.

A
property tax on a home
B
income earned from wages
C
sales tax on clothing
D
excise tax on gasoline
E
profits from investments
7

US federal income tax is progressive by law, but which best explains why wealthy individuals can often pay far less in taxes than the top tax rate?

A
High-income earners can fight in court for the right to a reduced rate.
B
High-income earners reduce their tax rates through numerous deductions.
C
High-income earners use tax laws to their advantage to reduce their tax rates.
D
High-income earners always place their assets overseas to lower their tax rates.
8

[BLANK]

A
spending
B
profit
C
debt
D
saving
9

What happens when a bank is required to hold more money in reserve?

A
It has less money for loans.
B
It has less money for operations.
C
It has less money for interest payments.
D
It has less money for withdrawals.
10

What part does interest play in deficit spending?

A
Governments must pay interest on money they borrow when they take on debt.
B
Citizens must pay interest when their governments borrow money.
C
Governments may charge foreign countries interest when they borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
11

In which of the following ways do governments spend money to meet public needs? Check all that apply.

A
by protecting the public
B
by arming the public
C
by providing health care
D
by supporting education
E
by building roads and bridges
12

Expansionary spending takes place when a government makes the decision to

A
put a freeze on the number of its employees.
B
raise taxes to balance its budget.
C
raise taxes to run a budget surplus.
D
raise spending to stimulate the economy.
13

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
14

Which group does the Fed serve?

A
financial institutions
B
consumers
C
government bodies
D
bankers
15

The diagram shows different types of policies.

Question illustration
A
The Best Economic Policies
B
Government Economic Policies
C
Ineffective Economic Policies
D
The Free Enterprise System
16

Which of these are goals of an expansionary policy? Check all that apply.

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates

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