Multiple choice

Which of the following is not a method to achieve desirable level of price?

  1. Imposing higher tax on luxury goods

  2. Imposing lower taxes on essential goods

  3. Imposing higher taxes on consumer goods

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Imposing higher taxes on consumer goods is not a method to achieve desirable level of price. The consumer goods are the goods, which are purchased by the average consumer like clothing, food, automobiles etc. If higher tax is imposed on consumer goods, average man has to spend a large portion of his income in the taxes and he will be left with very little money. Hence, it is not desirable to put higher taxes on consumer goods.

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