Question : What is the purpose of a tax credit?
Option 1: To decrease the amount of taxes owed by an individual or corporation
Option 2: To increase the amount of taxes owed by an individual or corporation
Option 3: To decrease the amount of government spending on social welfare programs
Option 4: To increase the amount of government revenue
Correct Answer: To decrease the amount of taxes owed by an individual or corporation
Solution : The correct answer is (a). To decrease the amount of taxes owed by an individual or corporation.
A tax credit is a financial incentive provided by the government to individuals or corporations that reduces the amount of taxes they owe. It is a direct reduction in the tax liability and is applied after the tax calculation has been made. Tax credits can be available for various purposes, such as promoting certain activities, stimulating economic growth, supporting specific industries, or providing assistance to individuals or families.
Tax credits are designed to incentivize certain behaviors or actions that the government deems beneficial to society or the economy. By reducing the amount of taxes owed, tax credits aim to encourage individuals or corporations to engage in activities that align with the government's policy objectives. Examples of tax credits include child tax credits, education credits, energy-efficient home credits, and research and development credits.
Question : What is the difference between a deficit and a debt?
Option 1: A deficit is the amount by which spending exceeds revenue in a given year, while a debt is the total amount of money owed by the government
Option 2: A deficit is the total amount of money owed by the government, while a debt is the amount by which spending exceeds revenue in a given year
Option 3: A deficit is the amount of money owed to foreign countries, while a debt is the amount of money owed to domestic lenders
Option 4: A deficit is the amount of money owed to domestic lenders, while a debt is the amount of money owed to foreign countries
Question : What is the purpose of a debt ceiling?
Option 1: To limit the amount of debt the government can take on
Option 2: To encourage economic growth
Option 3: To decrease taxes
Option 4: To decrease government spending
Question : What is the purpose of a tax expenditure?
Option 1: To increase government revenue
Option 2: To reduce government spending
Option 3: To stimulate economic growth
Option 4: To provide a tax break for certain activities or groups
Question : _______________ refers to the sum total of receipt from taxes and other duties imposed by the government.
Option 1: Tax revenue
Option 2: Non tax revenue
Option 3: Direct tax
Option 4: Indirect tax
Question : What is the purpose of a stimulus package?
Option 1: To increase government spending
Option 2: To decrease taxes
Option 3: To encourage economic growth
Option 4: To pay down the national debt
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