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Taxation Flashcards | StudBud

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Taxation

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#Edexcel #Alevel #Economics #Taxation

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Questions 10

Answers

1
Why does the government use taxation?
All of the above
To pay for government expenditure
To manage the economy as a whole
To correct market failure as externalities
2
What is a current budget deficit?
When government cannot afford to pay their bills
When government spends more than they have
when government revenue is more than current expenditure
when government revenues are less than current expenditure
3
Choose the factors below that influence fiscal deficits / National debt.
Debt Servicing
All of the above
Inter-gnerational equity
Interest Rates
4
What do economists argue a 'good' tax should be?
one that is compatible to foreign tax systems
All of the above
one that automatically adjusts to price level
one that leads to least loss / increase economic efficiency
5
Which type of tax falls as income increases?
Regressive
Progressive
Proportional
Direct
6
What type of surplus / deficit is caused by spending and tax decisions made by the government?
cyclical deficits and surpluses
Unforeseen events
Debt interest
Structural deficits and surpluses
7
What is a cyclical deficit?
occurs when government revenues = less than expenditure
Cause = government spending+taxes changing the trade cycle
Fiscal deficit that exists even why cyclical deficit is zero
Actual deficit/surplus not taking into account National Debt
8
What rate of tax discourages economic activity?
no marginal rate
high marginal rate
low marginal rate
medium marginal rate
9
What is indirect tax?
Value Added Tax (VAT)
Income Tax
A tax levied on an individual
A tax levied on goods and services
10
What is a direct tax?
Regressive Tax
A tax levied directly on individuals or companies
A tax levied on goods and services
Progressive Tax