Taxes And Govt Spending

Question 1

Tariff

Answer 1

A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers.

Question 2

Taxes as revenue producers

Answer 2

Tax incidence or tax burden does not depend on where the revenue is collected, but on the price elasticity of demand and price elasticity of supply.

Question 3

Budget deficits

Answer 3

A status of financial health in which expenditures exceed revenue. The term “budget deficit” is most commonly used to refer to government spending rather than business or individual spending. When referring to accrued federal government deficits, the term “national debt” is used.