Government, revenue and expenditure

Question 1

What are the two main categories of government revenue

Answer 1

Tax revenue and non-tax revenue

Question 2

What is tax?

Answer 2

Tax is an involuntary charge on income, expenditure, and well that is imposed by the government to finance government activities

Question 3

What are the types of taxation?

Answer 3

1. Direct tax
2. Indirect tax
3. Social Security contributions.
4. Capital tax

Question 4

Name, three types of nontax revenue

Answer 4

1. Rent of government property.
2. Profits of public corporations.
3. Dividends of shares owned by governments.

Question 5

What is direct taxation and what is indirect taxation?

Answer 5

Direct taxation is directly charged on income, wealth, or profit and paid directly to the government, eg; income tax

Indirect tax is imposed on the expenditure of goods and services collected by suppliers on behalf of the government . Eg; VAT

Question 6

What is the capital taxes?

Answer 6

Capital of taxes imposed on the transfer of property, such as buildings, copyrights and securities

Question 7

What are the types of tax?

Answer 7

1. Progressive tax
2. Regressive tax
3. Proportional tax.

Question 8

What are the main items of government expenditure?

Answer 8

Provision of public goods
Provision of merit goods
General administration
Provision of social security

Question 9

What are the effects of an aging population on government expenditure?

Answer 9

Increased healthcare spending
Higher pension and Social Security costs
Infrastructure investments

Question 10

What is a government budget?

Answer 10

Our financial plan that outlines the expected, revenues and expenditures of a government over specific period typically one year.

Question 11

What is a balanced budget, deficit and surplus?

Answer 11

A budget deficit occurs when government expenditure exceeds revenue

A budget surplus occurs when government revenues exceed expenditures

A balanced-budget occurs when revenues and expenditures are equal