How is state and local government funded and how does such funding differ from federal government funding?
What will be an ideal response?
State and local governments rely heavily on indirect taxes, such as sales taxes, excise taxes, and property taxes. At the state level, sales taxes are the largest source of revenue; and in some states, the income tax is becoming more important. (In an attempt to reduce regressivity, some states exempt groceries and prescription drugs from sales taxes.) Excise taxes at the state level include taxes on tobacco, alcohol, gasoline, and some luxury items. Cities rely heavily on property taxes for revenue. Some also impose income and sales taxes to obtain revenue. Both also rely to some extent on grants from the federal government.The federal government relies more on direct taxes than do state and local governments. The largest source of revenue is the personal income tax, a progressive tax. The second largest source of revenue is the payroll tax, a somewhat regressive tax. Other sources of revenue include the corporate income tax and various excise taxes, which are indirect taxes.
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A bank with insufficient reserves can increase its reserves by
A) lending federal funds. B) calling in loans. C) buying short-term Treasury securities. D) buying municipal bonds.
Which of the following is true?
a. Borrowers take bigger risks with their money than they would with other peoples' money b. Borrowers take bigger risks with other peoples' money than they would with their own c. Borrowers take big risks on investments regardless of whether it is their own money or not d. Borrowers should not be investing at all
The mutually understood standards that people follow from experience are called norms
Indicate whether the statement is true or false
Consumers may not experience the benefits of economies of scale if a natural monopoly:
A.) Raises price and fails to pass cost savings on to consumers. B.) Engages in marginal cost pricing. C.) Raises output beyond efficient levels. D.) Is regulated by the government.