Fiscal Policy: Taxes Answers
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A sales tax is a type of
A
progressive tax.B
indirect tax.C
proportional tax.D
direct tax.2
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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.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 of these is most likely the US government’s aim in taxing imported goods?
A
to protect domestic businessesB
to decrease international tradeC
to end reliance on foreign goodsD
to make US markets less desirable5
High government expenditures can lead to a bigger
A
revenue.B
stimulus.C
deficit.D
surplus.6
Under a contractionary taxation policy, the government can reduce the deficit by
A
increasing taxes.B
reducing taxes.C
increasing spending.D
increasing inflation.7
This graph shows US government revenue and expenditures between 1980 and 2010.
A
The government spends less than it receives year over year.B
The government should produce more money to cover spending.C
The government on average spends more than it collects.D
The government needs to lower taxes to cover spending.8
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.9
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.10
[BLANK]
A
expansionaryB
contractionaryC
proportionalDid you find these answers helpful?
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