Gasoline taxes are usually used in part to finance the road and highway repair and new construction. Which principle of taxation does this type of tax most fit and why?
What will be an ideal response?
This tax fits under the benefits-received principle of taxation. Presumably those who buy gasoline are also those who are using the roads and highways. Therefore, the tax is being levied on those who use the good or get a benefit from it.
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The economic functions of government differ from the political functions of government in that
A) the economic functions are carried out by the federal government, while the political functions are carried out by state and local governments. B) the economic functions include policies that affect income redistribution, while the political functions involve things that affect the way exchange is carried out. C) the economic functions involve things that affect the way exchange is carried out while the political functions include policies that affect income redistribution. D) the economic functions are carried out by state and local governments, while the political functions are carried out by the federal government.
Two main reasons that the deficit may increase are:
A. decreases in tax revenues and an increase in government spending. B. changes in interest rates and unemployment. C. increases in household spending and decreases in firm spending. D. decreases in tax revenues and government spending.
A corporation's shareholders are its:
a. board of directors. b. residual claimants. c. specialized active managers. d. supervisors.
A perfectly competitive firm should produce in the short run:
a. only if price exceeds average total cost. b. even if price is less than average variable cost. c. as long as price exceeds average fixed cost. d. as long as price exceeds average variable cost.