The ability-to-pay principle provides a direct connection between taxes and the use of revenue.TrueFalse

The principle of tax that stipulates that the time, mode and amount to be paid should be clear to the tax payer is Question 10Answer

An advantage of indirect taxes as a fiscal policy tool is that such taxes:A.can be adjusted almost immediately.B.minimize interference with consumer choices.C.have a greater impact on aggregate spending and output than direct government spending.

revenue arises when a business receives cash in one period, but does not provide all of the related goods or services until a later period. (Enter only one word.)

Explain the reasons why governments impose taxes and considerwhether an increase in income tax is fairer than an increase in salestaxes.

When the government imposes a tax on a firm that generates external costs, the tax is