#1
Which of the following is a progressive tax?
Income tax
ExplanationTax rate increases as income increases.
#2
What does GDP stand for in economics?
Gross Domestic Product
ExplanationTotal value of goods and services produced within a country.
#3
What is the term for a situation where the government spends more money than it collects in revenue?
Budget deficit
ExplanationShortfall in government finances.
#4
Which of the following is NOT a goal of taxation?
Control of population growth
ExplanationNot a primary purpose of taxation.
#5
What is the term for the total amount of goods and services produced within a country's borders in a specific time period?
GDP (Gross Domestic Product)
ExplanationMeasure of economic activity.
#6
Which of the following is NOT a tool of fiscal policy?
Money supply
ExplanationMonetary policy tool.
#7
What is the Laffer Curve used to illustrate in economics?
The relationship between tax rates and tax revenue
ExplanationOptimal tax rate for maximum revenue.
#8
What is the primary purpose of a value-added tax (VAT)?
To tax the value added at each stage of production
ExplanationTax levied on incremental value at each stage.
#9
Which of the following is an example of a regressive tax?
Sales tax
ExplanationImposes higher burden on low-income.
#10
Which of the following is an example of a direct tax?
Property tax
ExplanationTax directly levied on individuals or businesses.
#11
Which of the following is an example of an automatic stabilizer in fiscal policy?
Unemployment benefits
ExplanationStabilize economy without government action.
#12
What is the term for the ability of a tax system to distribute the tax burden across different income groups?
Tax equity
ExplanationFair distribution of tax burden.
#13
Which of the following is NOT a characteristic of a progressive tax system?
It places a greater burden on low-income earners
ExplanationCharacteristic of a regressive tax.
#14
In which of the following situations would a government likely use contractionary fiscal policy?
Low unemployment and high inflation
ExplanationTo cool down an overheated economy.
#15
Which of the following is an example of an explicit tax subsidy?
Tax credits for research and development
ExplanationDirect financial incentive.