AnswersHSA 26-27 EconomicsFiscal Policy: Taxes

Fiscal Policy: Taxes Answers

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1
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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.
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

proportionallyprogressivelyregressively

A
proportionally
B
progressively
C
regressively
4

expansionarycontractionaryproportional

A
expansionary
B
contractionary
C
proportional
5

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

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

sales taxtariffexcise tax

A
sales tax
B
tariff
C
excise tax
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 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.
13

best

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

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