Unit 5: The Government and the Economy

Why is taxation necessary?

• • enable government planning of the economy

• • enable government planning of the economy

• • control the money supply and manage economic growth

• • prevent a regressive method of production

Which describes a sales tax?

• • percentage charged on the purchase of goods

• • tax charged on each pack of cigarettes

• • percentage charged on profits from selling stocks

• • percentage charged on the value of a residential house

What does a progressive taxation system do?

• • funds social programs

• • raises prices on imports

• • creates government corporations

• • increases the tax rate as income rises

The World Trade Organization was formed in order to accomplish what?

• • collect protective tariffs

• • promote free trade

• • reduce distribution costs

• • facilitate currency exchange

Tariffs differ from taxes because tariffs are what?

• • collected on imported goods

• • charged only on income

• • a form of public equity

• • spent on government contractors

Which government official is required by law to deliver a budget to the U.S. Congress?

• • secretary of state

• • the president

• • speaker of the house

• • IRS director

Politicians can gain added support for themselves by approving what?

• • public goods

• • regressive taxation

• • environmental-protection laws

• • pork barrel projects

How can recent government spending be best described?

• • balanced with revenues

• • increasing

• • used only for public good

• • based on progressive goals

Which is a public good?

• • college education

• • school building

• • road

• • health care

Government corporations can be described as which of the following?

• • social service agencies

• • private sector companies

• • public sector corporations

• • anticompetitive monopolies