The following is a headline from the newspaper."Car drivers to pay higher taxes"What will result from an increased tax on cars?1 pointA increased employment in the car industryB increased petrol (gas) salesC reduced external costs of car useD reduced number of bus journeysClear selection
Question
The following is a headline from the newspaper."Car drivers to pay higher taxes"What will result from an increased tax on cars?1 pointA increased employment in the car industryB increased petrol (gas) salesC reduced external costs of car useD reduced number of bus journeysClear selection
Solution
The result of an increased tax on cars would likely be "C reduced external costs of car use". This is because higher taxes on cars could discourage people from buying or using cars, leading to less traffic, air pollution, and other external costs associated with car use. It's unlikely to increase employment in the car industry or petrol sales, as higher taxes would generally reduce demand for cars and, by extension, petrol. It could potentially reduce the number of bus journeys if people switch to public transport to avoid the higher car taxes, but this isn't a direct result of the tax increase itself.
Similar Questions
A person has gotten a new job with a much higher salary. He plans to spend his extra money on a new car and a great stereo system for his apartment.Which statement best describes the tax situation this person will likely face in the next year?A.He will pay more in both income tax and sales tax.B.He will pay more in both property tax and income tax.C.He will pay more in sales tax but less in income tax.D.He will pay more in income tax but less in property tax.
10. A government taxes the production of cars. What is likely to decrease?A) The cost of supplying carsB) The price of carsC) The revenue for the governmentD) The supply of cars at every price
All other things unchanged, a tax on a product that leads to an increase in the cost of production would:Question 17Select one:a.lead to an increase in supply.b.lead to a decrease in demand.c.result in an increased price.d.lead to a decrease in supply.
Explain the reasons why governments impose taxes and considerwhether an increase in income tax is fairer than an increase in salestaxes.
Lower taxes create a multiplier effect in the economy. It leads to:Group of answer choicesincreases in aggregate demand.subsidies.decreases in prices.technological advances.
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