Answered: Choose the Letter of the Correct…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter16: Government Spends, Collects, And Owes

Section: Chapter Questions

Problem 22AA

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Question

Choose the Letter of the Correct Answer.

1. It is an act of laying a tax.

A. Theory of tax

B. Taxation

C. Taxing

D. Tax

2. A tax imposed by the government at each stage in the production of goods.

A. Excise

B. Value –added tax

C. Property

D. Individual tax

3. A tax imposed for the general purposes of the government to raise revenue for the

local area needs.

A. National

B. Municipal

C. Community

D. Local

4. It is sanction imposed as a punishment for violation of law or acts deemed injurious.

A. Tax

B. Penalty

C. Fine

D. Debt

5. This kind of tax is derived from the individuals, corporate estates, and trusts income.

A. Income tax

B. Capital gains tax

C. Donor Tax

D. Estate tax

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

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