ROLE OF GOVERNMENT

Front

Inflation will ________ the purchasing power of _________.

Back

reduce; consumers

Front

A budget deficit occurs when ____________.

Back

the government's total expenditure exceeds revenue

Front

Which of the following is a government's mandatory spending: defense and security, social security, education, infrastructure?

Back

social security

Front

Hunter pays a tax of $3,000 on his income of $60,000, while Daniel pays a tax of $1,200 on his income of $40,000. This tax structure is _______.

Back

progressive

Front

A tax rate which goes on increasing with income is a(an) _________ tax.

Back

progressive

Front

The tax rate of proportional tax remains constant even if income ______.

Back

increases or decreases

Front

Mark pays a tax of $400 on her income of $7000, while Kelly pays a tax of $220 on her income of $5000. This tax structure is ________.

Back

regressive

Front

The tax structure, whereby the wealthy pay a higher percentage of their income as tax compared to the poor, is known as _________ tax.

Back

progressive

Front

The government reduced the personal income taxes rates to encourage household spending. This is an example of _______ policy.

Back

fiscal

Front

This term is related to the idea of "second-hand consequences"

Back

Externalities