Government Income and Expenditure - unit 2

Question 1

What are 3 main areas of government spending?

Answer 1

Health, education and benefits

Question 2

What are 3 sources of the government’s income?

Answer 2

Income tax, VAT and excise duties

Question 3

Define direct tax -

Answer 3

A tax on income

Question 4

Define an indirect tax -

Answer 4

A tax on spending

Question 5

Define regressive taxation -

Answer 5

A tax which takes a greater proportion of income from lower income earners than higher income earners

Question 6

A redistribution of income refers to:

Answer 6

Attempts to alter the balance between people usually to benefit the less well off

Question 7

Income

Answer 7

A flow of money received over a period of time

Question 8

Wealth

Answer 8

Stock of assets that are owned

Question 9

Define progressive taxation -

Answer 9

A tax which takes a greater proportion off of higher income earners

Question 10

Define Proportional taxation -

Answer 10

A tax which takes the same proportion of income off of all income earners

Question 11

3 arguments for redistribution

Answer 11

Reduces inequality, keeps some out of poverty, increases life expectancy

Question 12

3 arguments against redistribution

Answer 12

Disincentive to earn a higher wage, top earners may leave the UK, people can abuse the benefits system