Private Secetor

Question 1

Definition of Government intervention

Answer 1

When the government intervenes in the economy because the market is failing to meet the needs of the people.

Question 2

Definition of emplyment subsidies

Answer 2

wage subsidies and to reduce unemployment,

Question 2

Definition of Subsidies.

Answer 2

Financial assistance by government to influence the production and consumption of goods and services.

Question 3

Definition of Producer subsidies

Answer 3

Payment to the producer with the aim of decreasing the price of a product.

Question 4

Definition of Consumer subsidies

Answer 4

Is a payment to the consumer of a particular good or service

Question 4

Definition of Taxes

Answer 4

Compulsory payments made by people and businesses of a country to the state.

Question 5

Definition of Direct taxes

Answer 5

Taxes on income of individuals and businesses profit

Question 6

Examples of Direct taxes.

Answer 6

1. Personal income tax
2. Corporate income tax.

Question 7

Definition of indirect taxes

Answer 7

Taxes on the consumption of goods and services.

Question 8

Examples of indirect taxes

Answer 8

1. Vat (Value added tax)
2. Expenditure taxes

Question 9

Examples of Excise duty

Answer 9

Alcohol and tabacco.

Question 10

Definition of Excise duty (Sin tax)

Answer 10

Tax levied onto consumption of particular goods

Question 11

Definition of Customs duty

Answer 11

Added onto price of imported goods and usually calculated as percentage of value of the goods.

Question 12

Definition of Transfer duty

Answer 12

Individuals and businesses pay when buying fixed property.

Question 13

What is regressive tax?

Answer 13

Rate falls as income rises

Question 14

What is progressive tax

Answer 14

Marginal rate of tax rises as income rises

Question 15

What is proportional tax?

Answer 15

Levies same percentage tax to everyone regardless in income.

Question 16

What is welfare?

Answer 16

Refers to economic well-being of the public, is action designed to promote basic physical and material well-being of people in need.

Question 17

What is production.

Answer 17

When the government provides goods and services which are not provided by the private sector

Question 18

What are public goods

Answer 18

Goods provided for the benefit of a country like police or streetlights

Question 19

What are merit goods

Answer 19

Goods and services that are needed by the whole community to improve welfare like housing and education

Question 20

What is Privatization?

Answer 20

Sale of government-owned enterprises to private shareholders

Question 20

What is nationalization?

Answer 20

When the government takes ownership of a businesses from the private sector

Question 21

What is maximum prices?

Answer 21

When government sets price of product below market price

Question 22

What is the black market

Answer 22

An illegal market where goods are bought and sold illegally and illegal prices are demanded

Question 23

What are minimum prices

Answer 23

When government sets price of product above market price

Question 24

What is dumping?

Answer 24

The sale of surplus products ina nother country al a lower price than the market price

Question 25

What is minimum wages?

Answer 25

Minimums amount of compensation an employee must receive for work performed

Question 26

What is unemployment?

Answer 26

When people who want to work and can work but cannot find work.