Taxation

In 2008, the government of Argentina imposed a tax on exports of wheat and soya beans.

What was the most likely aim of this tax?

• to increase agricultural output

• to increase exports

• to reduce a budget surplus

• to reduce the rise in domestic food prices

A government collects the following revenue in a year.

What is the amount of indirect tax revenue?

• $30 m

• $70 m

• $100 m

• $500 m

The graph shows the impact of a tax on the supply of petrol (gas).

What can be concluded from this graph?

• the government will receive no tax revenue

• the impact of the tax will be shared between the consumer and the producer

• the impact of the tax will fall entirely upon the consumer

• the impact of the tax will fall entirely on the producer

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A government wants to redistribute income from the rich to the poor. Which changes in taxation would help it to achieve this objective?

• a cut in corporate tax and a rise in sales tax

• a cut in VAT and a rise in income tax

• a cut in capital gain tax and inheritance tax

• a rise in customs duties and excise duties

In which circumstances will the greatest amount of the tax be borne by the consumer?

• PED - ELASTIC, PES - INELASTIC

• PED - INELASTIC, PES - ELASTIC

• PED - INELASTIC, PES - INELASTIC

• PED - ELASTIC, PES - INELASTIC

The following diagram shows the effect of introducing a tax. What is the resultant producers' revenue?

• OZXQ1

• OPAQ1

• OP1TQ1

• OPYQ