Economics

What is a Direct Tax?

• a tax on electricity

• a tax on imported goods

• a tax on services

• a tax on income and wealth

A government achieves a high rate of economic growth.

How may this conflict with other government aims?

• it may increase government income

• it may increase incomes for the lower paid

• it may increase the supply of exports

• it may increase the volume of imports

The directors of a firm have to discuss the following topics.

Which topic is least likely to be directly affected by the government's influence on the firm?

• health and safety laws

• the interest it pays on borrowed money

• the minimum wage it must pay its workers

• the replacement of the director of finance

Direct taxes can be used to:

• place the burden of tax on sellers not buyers

• protect domestic industries from foreign competition

• raise revenue without affecting the number of hours employees work.

• redistribute incomes from rich to poor

Brazil is a highly taxed economy. Some Brazilian economists have suggested that if the government were to cut taxes, the government would actually receive more tax revenue.

Why may cutting taxes increase revenue?

• it may encourage emigration

• it may increase the tax burden

• it may lead to a fall in investment

• it may reduce tax evasion

What is most likely to be the responsibility of a central government?

• the provision of immigration officials at an airport

• the provision of security cameras in a shopping centre

• the provision of security staff at a bank

• the provision of ticket inspectors on a train

When is a direct tax described as progressive?

• when the government changes the basic rate of tax in each budget

• when the government taxes companies rather than individuals

• when the tax takes a larger proportion of earnings as earnings increase

• when the tax takes a smaller proportion of earnings as earnings increase

During 2009 some government adopted policies to try end recession in their country and increase economic growth.

Which combination of policies os most likely to achieve this?

• lower taxes and decrease government spending

• lower taxes and increase government spending

• raise taxes and decrease government spending

• raise taxes and increase government spending

What would be classified by an economist as the factor of production known as land?

• a discovery of oil in the South China Sea

• an oil rig bought by an oil company

• money held by the oil companies in their bank accounts

• the productivity of oil workers

Which activity takes place in the tertiary sector?

• assembling computers

• giving legal advice

• harvesting grain

• making bread