Answers IL-EconomicsFiscal Policy: Spending

5.1 Fiscal Policy: Taxes Answers

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proportionallyprogressivelyregressively

proportionally

progressively

regressively

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Governments collect taxes to ensure that

there is sufficient money to fund private businesses.

citizens contribute to meeting society's needs.

politicians get paid in a timely manner.

a government program exists for every need that arises.

best

regressive tax

indirect tax

direct tax

proportional tax

Which of these is most likely the US government’s aim in taxing imported goods?

to protect domestic businesses

to decrease international trade

to end reliance on foreign goods

to make US markets less desirable

Which statements best describe sales tax? Check all that apply.

Sales tax does not affect low-income groups.

Sales tax is an indirect tax levied on goods and certain services.

Sales tax is a type of regressive taxation.

Sales tax is a direct tax paid by consumers to the government.

Sales tax affects high-income groups.

Which best explains how contractionary policies can hamper economic growth?

They increase consumer demand.

They can increase inflation.

They reduce taxes which raises deficits.

They reduce disposable income.

How is an excise tax different from a sales tax?

An excise tax is not deductible.

An excise tax applies to specific products.

An excise tax applies only to imported goods.

An excise tax is an indirect tax.

A sales tax is a type of

progressive tax.

indirect tax.

proportional tax.

direct tax.

If expansionary taxation policies encourage growth, are they always appropriate to implement?

No, government services could encourage growth but other practices could be more effective based on the economic situation.

Yes, the private sector can easily and affordably replace all services and facilities cut by the government.

No, the government is capable of providing many but not all services individuals and businesses need.

Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.

What gives the US government the power to collect taxes?

the Constitution

laws passed by Congress

an executive order

common law

Which of these best describes income tax?

regressive tax

indirect tax

direct tax

proportional tax

expansionarycontractionaryproportional

expansionary

contractionary

proportional

How is an excise tax different from a sales tax?

An excise tax is not deductible.

An excise tax applies to specific products.

An excise tax applies only to imported goods.

An excise tax is an indirect tax.

How are progressive taxes and regressive taxes similar?

Both charge high-income individuals more.

Both are considered flat taxes.

Both generate revenue for public services.

Both are types of indirect taxes.

How are progressive taxes and regressive taxes similar?

Both charge high-income individuals more.

Both are considered flat taxes.

Both generate revenue for public services.

Both are types of indirect taxes.

Governments collect taxes to ensure that

there is sufficient money to fund private businesses.

citizens contribute to meeting society's needs.

politicians get paid in a timely manner.

a government program exists for every need that arises.

High government expenditures can lead to a bigger

revenue.

stimulus.

deficit.

surplus.

This graph shows US government revenue and expenditures between 1980 and 2010.

The government spends less than it receives year over year.

The government should produce more money to cover spending.

The government on average spends more than it collects.

The government needs to lower taxes to cover spending.