AnswersHSA 26-27 EconomicsFiscal Policy: Taxes

Fiscal Policy: Taxes (continued) Answers

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1
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What gives the US government the power to collect taxes?

A
the Constitution
B
laws passed by Congress
C
an executive order
D
common law
2
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Which statements best describe sales tax? Check all that apply.

A
Sales tax does not affect low-income groups.
B
Sales tax is an indirect tax levied on goods and certain services.
C
Sales tax is a type of regressive taxation.
D
Sales tax is a direct tax paid by consumers to the government.
E
Sales tax affects high-income groups.
3

High government expenditures can lead to a bigger

A
revenue.
B
stimulus.
C
deficit.
D
surplus.
4

best

r
regressive tax
i
indirect tax
d
direct tax
p
proportional tax
5

A sales tax is a type of

p
progressive tax.
i
indirect tax.
p
proportional tax.
d
direct tax.
6

Governments collect taxes to ensure that

t
there is sufficient money to fund private businesses.
c
citizens contribute to meeting society's needs.
p
politicians get paid in a timely manner.
a
a government program exists for every need that arises.
7

How are progressive taxes and regressive taxes similar?

A
Both charge high-income individuals more.
B
Both are considered flat taxes.
C
Both generate revenue for public services.
D
Both are types of indirect taxes.
8

expansionarycontractionaryproportional

A
expansionary
B
contractionary
C
proportional
9

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

A
to protect domestic businesses
B
to decrease international trade
C
to end reliance on foreign goods
D
to make US markets less desirable
10

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

N
No, government services could encourage growth but other practices could be more effective based on the economic situation.
Y
Yes, the private sector can easily and affordably replace all services and facilities cut by the government.
N
No, the government is capable of providing many but not all services individuals and businesses need.
Y
Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.
11

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

i
increasing taxes.
r
reducing taxes.
i
increasing spending.
i
increasing inflation.
12

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.
13

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

Question illustration
T
The government spends less than it receives year over year.
T
The government should produce more money to cover spending.
T
The government on average spends more than it collects.
T
The government needs to lower taxes to cover spending.
14

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.
15

How is an excise tax different from a sales tax?

A
An excise tax is not deductible.
A
An excise tax applies to specific products.
A
An excise tax applies only to imported goods.
A
An excise tax is an indirect tax.
16

proportionallyprogressivelyregressively

A
proportionally
B
progressively
C
regressively
17

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

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