41) Fiscal policy

Question 1

What is fiscal policy?

Answer 1

Government spending and taxation

Question 2

What are the 2 kinds of tax?

Answer 2

1) Direct taxes (levied directly on individuals or organisations e.g. income tax or corporation tax)
2) Indirect taxes (levied on goods and services e.g. VAT or council tax)

Question 3

What is a progressive tax?

Answer 3

One where the proportion of income paid in tax increases as income rises

Question 4

What is a regressive tax?

Answer 4

One where the proportion of income paid in taxes decreases as income rises

Question 5

What is a proportional tax?

Answer 5

One where the proportion of income paid in taxes remains constant as income rises