Unit 4 PF Quiz 1

Which of the following is a direct tax?

• Property tax

• Sales tax

• Excise tax

• Value-added tax

Which tax is regressive in nature?

• Sales tax

• Income tax

• Property tax

• Estate tax

What is the main purpose of taxes?

• Fund public goods and services

• Increase inflation

• Reduce wages

• Support only federal programs

How many federal income tax brackets are there in the U.S.?

• 7

• 5

• 6

• 8

Property tax is an indirect tax.

• True

• False

A proportional tax is defined as:

• A tax where the rate remains the same regardless of income level.

• A tax where the rate increases as income increases.

• A tax where the rate decreases as income increases.

• A tax that is only applied to luxury goods.

Which government agency collects federal income tax?

• IRS

• FBI

• CIA

• Treasury Department

Which goods are commonly exempt from sales tax?

• Pharmaceuticals

• Jewelry

• Electronics

• Luxury cars

Marginal tax rate applies only to your total income.

• True

• False

List two examples of public goods funded by taxes.

• roads, public schools

• private clubs, shopping malls

• movie theaters, restaurants

• luxury cars, jewelry