Topic 5 - Price Mechanisms In Action Flashcards
1
Q
Indirect tax
A
A tax levied on expenditure on goods or services e.g. VAT
2
Q
Incidence of tax
A
The way in which the burden of paying a sales tax is divided between buyers and sellers.
3
Q
Advalorem tax
A
Where the tax is percentage of the price e.g. VAT 20%
4
Q
Specific tax
A
A tax placed on goods and services which is a fixed amount per unit
5
Q
Subsidy
A
A payment given by government to producers to encourage production of a good or service by lowering the costs of production for firms.
