Government Taxation and Spending Quiz

Test your knowledge on taxation, fiscal policy, and government spending with these Public Finance quiz questions.

#1

Which of the following is an example of direct taxation?

Sales tax
Property tax
Corporate income tax
Excise tax
#2

Which government agency is responsible for collecting federal income taxes in the United States?

Internal Revenue Service (IRS)
Federal Trade Commission (FTC)
Securities and Exchange Commission (SEC)
Federal Reserve System (the Fed)
#3

What is the term for the portion of income that individuals or businesses are required to pay to the government?

Profit margin
Tax bracket
Tax deduction
Taxation
#4

Which of the following is NOT a form of government spending?

Social Security benefits
Public education funding
Corporate subsidies
Income tax refunds
#5

Which of the following is NOT a tool of fiscal policy?

Government spending
Taxation
Interest rates
Transfer payments
#6

What is the primary purpose of fiscal policy?

To control inflation
To regulate money supply
To influence economic activity
To stabilize exchange rates
#7

Which economic theory advocates for lower taxes and minimal government intervention in the economy?

Keynesian economics
Monetarism
Supply-side economics
Austrian economics
#8

What is the term for a tax where the percentage of income paid in taxes decreases as income increases?

Flat tax
Progressive tax
Regressive tax
Proportional tax
#9

In economics, what is the term for the total amount of money a government owes to creditors?

Budget surplus
National debt
Gross domestic product (GDP)
Trade deficit
#10

Which of the following is an example of an automatic stabilizer in fiscal policy?

Unemployment benefits
Corporate tax cuts
Infrastructure spending
Defense spending
#11

What is the primary goal of contractionary fiscal policy?

To stimulate economic growth
To decrease government spending
To reduce inflation
To increase unemployment
#12

Which of the following is NOT a characteristic of expansionary fiscal policy?

Increased government spending
Decreased taxes
Higher interest rates
Intended to stimulate economic growth
#13

What is the term for the level of government spending and taxation at which the economy is producing at full employment and price stability?

Fiscal equilibrium
Fiscal responsibility
Fiscal neutrality
Fiscal policy

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