Understanding Taxes and Fiscal Policy

Front

Which of the following is a tax on the earnings of individuals? Corporate income tax, Personal income tax, Excise tax, Sales tax

Back

Personal income tax

Front

What does IRS stand for?

Back

Internal Revenue Service

Front

Which tax is specifically collected to fund retirement benefits for workers? Options: Medicare tax, Excise tax, Social Security tax, Sales tax

Back

Social Security tax

Front

A tax that takes a larger percentage of income from high-income earners than from low-income earners is called:

Back

Progressive tax

Front

Which of the following best defines a budget? Options: The total amount of money a country owes, A plan for how to spend and raise money, The amount by which expenses exceed income, The amount by which income exceeds expenses

Back

A plan for how to spend and raise money

Front

What is the main purpose of a tax deduction?

Back

To reduce taxable income

Front

Which of the following is an example of a regressive tax? Federal income tax, Sales tax, Corporate income tax, Social Security tax

Back

Sales tax

Front

If a government spends more than it collects in revenue in a year, this is called a:

Back

Deficit

Front

Which tax is paid by businesses on their profits?

Back

Corporate income tax

Front

What is the difference between gross income and net income?

Back

Gross income is before taxes; net income is after taxes and deductions