Fiscal Policy: Taxes

18 October 2022
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10 test answers

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question
Which best explains how contractionary policies can hamper economic growth? a. They increase consumer demand. b. They can increase inflation. c. They reduce taxes which raises deficits. d. They reduce disposable income.
answer
d. They reduce disposable income.
question
If expansionary taxation policies encourage growth, are they always appropriate to implement? a. No, government services could encourage growth but other practices could be more effective based on the economic situation. b. Yes, the private sector can easily and affordably replace all services and facilities cut by the government. c. No, the government is capable of providing many but not all services individuals and businesses need. d. Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.
answer
a. No, government services could encourage growth but other practices could be more effective based on the economic situation.
question
The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed____ a. proportionally b. progressively c. regressively.
answer
a. proportionally
question
Which are examples of programs or projects most likely funded by taxes paid by citizens of the United States? Check all that apply. a. constructing a highway b. collecting garbage c. developing a vacation resort d. building of private homes e. maintaining state parks
answer
a. constructing a highway b. collecting garbage e. maintaining state parks
question
How is an excise tax different from a sales tax? a. An excise tax is not deductible. b. An excise tax applies to specific products. c. An excise tax applies only to imported goods. d. An excise tax is an indirect tax.
answer
b. An excise tax applies to specific products.
question
A(n)___________ tax is a tax issued by the federal government on imported goods. a. sales tax b. tariff c. excise tax
answer
b. tariff
question
This graph shows US revenue and expenditures between 1980 and 2010. Which statements describe what this graph indicates about government spending? Check all that apply. a. The government needs to raise taxes or cut spending. b. The government spends too much money. c. The government should produce more money to cover spending. d. The government almost always spends more than it collects. e. The government needs to lower taxes to cover spending.
answer
a. The government needs to raise taxes or cut spending. b. The government spends too much money. d. The government almost always spends more than it collects.
question
Governments collect taxes to ensure that a. there is sufficient money to fund private businesses. b. citizens contribute to meeting society's needs. c. politicians get paid in a timely manner. d. a government program exists for every need that arises.
answer
b. citizens contribute to meeting society's needs.
question
High government expenditures can lead to a bigger a. revenue. b. stimulus. c. deficit. d. surplus.
answer
c. deficit.
question
How are progressive taxes and regressive taxes similar? a. Both charge high-income individuals more. b. Both are considered flat taxes. c. Both are determined based on income. d. Both are types of indirect taxes.
answer
c. Both are determined based on income.