Question :
31) From the perspective of individuals, the goods and services : 1384332
31) From the perspective of individuals, the goods and services tax (GST) applies to
A) additional income earned.
B) expenditure rather than income.
C) profits for self-employed individuals.
D) saving rather than expenditure.
E) total taxable income.
32) The goods and services tax (GST) in Canada is an example of a(n)
A) proportional tax.
B) invisible tax.
C) progressive tax.
D) excise tax.
E) value-added tax.
33) The most important source of revenue for the Canadian federal government is ________ taxes; the most important source of revenue for Canadian municipal governments is ________ taxes.
A) income; excise
B) property; payroll
C) corporate; sales
D) sales; property
E) income; property
34) Suppose a firm buys $1000 worth of inputs from other firms, hires $1000 worth of labour services, and has sales revenue of $2500. The firm’s resulting profit is $500. According to a value-added tax such as the GST, this firm would pay taxes on
A) $500.
B) $1000.
C) $1500.
D) $2500.
E) $4500.
35) Suppose a firm buys $3000 worth of inputs from other firms, hires $2000 worth of labour services, and has sales revenue of $7500. The firm’s resulting profit is $2500. If the GST (a value-added tax) rate is 5%, this firm will pay ________ in GST.
A) $0
B) $125
C) $225
D) $375
E) $2500
36) The Canadian federal income tax is progressive because it has
A) marginal and average rates that rise and are equal at most levels of income.
B) marginal rates that are higher than average rates at most levels of income.
C) average rates that rise but marginal rates that are constant at most levels of income.
D) marginal rates that are lower than average rates at most levels of income.
E) average and marginal rates that are constant at most levels of income.
37) In Canada, the corporate income tax is integrated with the ________, so that ________ are not taxed twice on the firm’s earnings.
A) sales tax; consumers
B) property tax; corporations
C) personal income tax; corporations
D) sales tax; shareholders
E) income; shareholders
38) The federal corporate income tax in Canada is
A) a proportional tax on profits.
B) a progressive tax on revenues.
C) a proportional tax on revenues.
D) a flat tax on revenues.
E) a progressive tax on profits.
39) The various provincial sales taxes are mildly regressive because
A) richer households spend more in total and therefore pay more sales tax.
B) poorer households tend to spend a larger proportion of their incomes than richer households.
C) they are indirect taxes.
D) they are value added taxes.
E) richer households can avoid paying sales taxes while poorer households cannot.
40) Interest earnings from accumulated savings are subject to personal income tax in Canada. As a result,
A) total national saving is higher than it otherwise would be.
B) there will be more capital accumulated for the economy.
C) the interest paid on savings accounts increases.
D) individuals have a reduced incentive to save.
E) taxes applied to this income are regressive.
