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ECO 450 Week 10 Quiz

Question 1

According to the Harberger model of the incidence of the corporate income tax, the tax:

Question 2

Under the corporation income tax in the United States,

Question 3

Accelerated depreciation allows corporations to:

Question 4

If corporations maximize profits, the short-run incidence of a tax on its profits will be borne by:

Question 5

The tax base for the corporate income tax in the United States is:

Question 6

The double taxation of dividends under U.S. tax code means:

Question 7

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?

Question 8

If interest on corporate debt is tax deductible, a firm’s return on equity increases because:

Question 9

Assuming that the supply of savings is perfectly inelastic, the corporate income tax prevents the attainment of efficiency by:

Question 10

If the supply of savings is not perfectly elastic, the corporate income tax is likely to:

Question 11

In the long run a corporate income tax that initially reduces the return to investment in the corpo­rate sector will also:

Question 12

If corporations maximize profit, a corporate income tax:

Question 13

Assuming that corporations maximize profits and investors seek to maximize the return to their investments, the long-run impact of a corporate income tax is to:

Question 14

The effective tax rate is:

Question 15

Which of the following is true about the economic effects of the corporate income tax?

Question 16

In most states, the retail sales tax can be regarded as equivalent to a:

Question 17

The differential incidence of substituting a tax on comprehensive consumption for a tax on compre­hensive income is likely to be:

Question 18

Suppose two individuals earn the same salary each year over their lifetimes. One individual saves 25 percent of his income each year, while the other saves nothing. Over their lifetimes under a comprehensive income tax,

Question 19

The value-added tax used in the European Union:

Question 20

Consumption-in-kind:

Question 21

As administered in most states in the United States, the retail sales tax:

Question 22

Comprehensive consumption is:

Question 23

A flat-rate tax on comprehensive consumption:

Question 24

Which of the following taxes is likely to be most favorable for capital accumulation?

Question 25

The invoice method of collecting the value-added tax:

Question 26

Which of the following statements about taxes on consumption are true?

Question 27

A consumption-type, value-added tax:

Question 28

An adult’s life cycle is considered to begin:

Question 29

Assuming that a person never receives any cash gifts or bequests, a tax on comprehensive con­sumption is equivalent to a(n):

Question 30

A tax on comprehensive consumption