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