Module 4 Taxes Test Review

Taxes pay for "necessary" services the public requires like fire departments, the military, and public schooling.

• True

• False

When U.S. citizens pay taxes, the government spends it on things like building car washes, restaurants, and movie theaters.

• True

• False

Citizens pay taxes to the government, but businesses are not required.

• True

• False

The federal, state, and local governments levy income taxes.

• True

• False

A federal sales tax does not exist.

• True

• False

The local government is the only government entity that provides military spending.

• True

• False

Which of the following is a likely outcome of consumers paying higher taxes?

• Consumers tend to spend more money, so the health of the economy is better.

• Consumers tend to spend less money, so the health of the economy is worse.

• Consumers tend to spend less money, so the health of the economy is better.

• Consumers tend to spend more money, so the health of the economy is worse.

Which of the following is not a tax benefit that incentivizes someone to save for their future?

• owning a house

• having a education savings account

• having a retirement savings account

• owning a private plane

If a business makes less money, it will likely _____.

• pay less in taxes

• increase employee wages

• spend more money

• try to avoid tax incentives

With a regressive tax, a person who makes less income will _____ than someone who makes a higher income.

• spend more of their income on sales taxes

• spend less of their income on sales taxes

• spend the same amount of their income on sales taxes

• will spend none of their income on sales taxes