Fiscal Policy: Taxes Answers

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1
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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.
2
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Under an expansionary taxation policy, the government tries to stimulate economic growth by

A
reducing deficits.
B
reducing taxes.
C
reducing demand.
D
reducing spending.
3

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.
4

Which best describes how expansionary policies can facilitate economic growth?

A
They prompt decreased demand.
B
They inspire consumer confidence.
C
They increase disposable income.
D
They help reduce consumer debt.
5

High government expenditures can lead to a bigger

A
revenue.
B
stimulus.
C
deficit.
D
surplus.
6

Property taxes are usually determined based on

A
the property owner's income.
B
the amount of money invested in the property.
C
the earnings generated by the property.
D
the value of the property.
7

Under a contractionary taxation policy, the government can reduce the deficit by

A
increasing taxes.
B
reducing taxes.
C
increasing spending.
D
increasing inflation.
8

sales taxtariffexcise tax

A
sales tax
B
tariff
C
excise tax
9

Which programs or projects are most likely funded by taxes paid by the citizens of the United States? Select three options.constructing a highwaypublic school fundingdeveloping a vacation resortbuilding of private homesmaintaining state parks

A
constructing a highway
B
public school funding
C
developing a vacation resort
D
building of private homes
E
maintaining state parks
10

Which of these best describes income tax?

A
regressive tax
B
indirect tax
C
direct tax
D
proportional tax

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