Chapter 13: Indirect Taxes & Subsidies Flashcards
1
Q
What is an indirect tax
A
Tax on expenditure (paid on the consumption of goods/services)
2
Q
Ad valorem tax
A
An indirect tax which is a % of the price
3
Q
Specific unit tax
A
An indirect tax which is a fixed tax per unit of volume purchased
4
Q
Subsidy
A
A grant given that lowers the price of a good, usually designed to encourage the production or consumption of a good
