AnswersHSA 26-27 EconomicsFiscal Policy: Taxes

The Government's Budget Answers

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1
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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.
2
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best

r
regressive tax
i
indirect tax
d
direct tax
p
proportional tax
3

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.
4

Which best describes how expansionary policies can facilitate economic growth?

A
They prompt decreased demand.
B
They inspire consumer confidence.
C
They increase disposable income.
D
They help reduce consumer debt.
5

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.
6

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
7

A sales tax is a type of

A
progressive tax.
B
indirect tax.
C
proportional tax.
D
direct tax.
8

expansionarycontractionaryproportional

A
expansionary
B
contractionary
C
proportional
9

sales taxtariffexcise tax

A
sales tax
B
tariff
C
excise tax
10

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

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

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
12

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.
13

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.

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.
14

High government expenditures can lead to a bigger

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

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