AnswersHSA 26-27 EconomicsFiscal Policy: Taxes

Fiscal Policy: Taxes Answers

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9

Based on the information provided, what type of tax has Country Q implemented?

A
an income tax
B
a tariff
C
a corporate tax
D
an excise tax
10

Based on what you have read, what type of tax is Robert paying?

A
a tariff
B
a sales tax
C
an excise tax
D
a corporate tax
11

What action can the government of Country DF take to encourage citizens to purchase homes?

A
maintain corporate tax rates
B
raise income taxes
C
raise property tax rates
D
lower income taxes for homeowners
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13

How can expansionary and contractionary tax policies be used to manage the economy?Be sure to give your answer in two to three sentences.

Answer:

Expansionary tax policy involves lowering taxes to increase disposable income and stimulate economic growth during a recession. Conversely, contractionary tax policy involves raising taxes to reduce overall spending and slow down inflation when the economy is overheating.

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