Tag: government and taxes

Quizzes (12) Questions (131)

Questions Related to government and taxes

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

Levy of excise duty on a product has_____.

  1. income and substitution effect thus causing reduction in demand

  2. income effect only

  3. substitution effect only

  4. black marketing of the goods
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Levying an excise duty increases the price of a product, which reduces the consumer's real purchasing power (income effect) and encourages them to switch to cheaper alternatives (substitution effect), leading to lower demand.

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

In a developing economy ________ plays a role.

  1. no taxation

  2. regressive taxation

  3. progressive taxation

  4. proportional taxation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Developing economies often utilize progressive taxation to reduce income inequality and fund public infrastructure. This system ensures that those with higher incomes pay a higher percentage of their earnings in taxes.

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

A tax that takes away a higher proportion of ones income, as the income rises is termed as __________.

  1. Progressive Tax

  2. Proportional tax

  3. Regressive tax

  4. Indirect tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A progressive tax is defined by a system where the tax rate increases as the taxable amount increases. This means higher earners pay a larger proportion of their income compared to lower earners.

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

Which of the following taxes are included in price?

  1. Direct tax

  2. Wealth tax

  3. Income tax

  4. Indirect tax
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Indirect taxes are collected by intermediaries (like sellers) and passed on to the government. Because they are added to the cost of goods and services, they are effectively included in the final price paid by the consumer.