Week 3 Quiz [100% Score]
1.The government taxes consumers in order to _________
All of the these.
2.Horizontal equity is most closely aligned with ______________ taxes.
proportional
3.If the market for loanable funds is at equilibrium and the interest rate rises, what will happen?
4.What is an example of a tax that can be imposed by federal, state, and local authorities?
Income tax
5.If a sum of money is invested for one year at 9% interest, it’s value will be $120. What is the present value of this investment?
$110
6.Taxation is the primary means of __________________
financing the government.
7.Paying corporate and payroll taxes are the responsibility of the ___________.
corporation
8.The securities market line assists in evaluating an asset’s ________ and __________.
risk; return
9. If the interest rate is 5% and a firm issues a five year bond for $1,000, approximately how much will the firm repay at the end of the five years?
$1,282
10.The longer the time horizon to an investment’s maturity, the ________ the expected risk and the _________ the expected risk premium.
higher; higher
11. Anthony earns $110,000 per year. The first $50,000 is taxed at 20%; the next $50,000 is taxed at 40% and any amount greater than $100,000 is taxed at 60%. What is the average tax (1) and the marginal tax (2)?
32.73% (1); 60% (2)
12.Which of the following is an example of a payroll tax?
Withholding tax
13.Which of the following is a financial intermediary?
All of these
14.What is the major function of financial intermediaries?
All of these answers
15.What is the future value of $105 invested for one year at 7%?
$112
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