Multiple Choice
Which of the following are two important reasons for businesses to operate globally?
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0. Basic Principles of Economics
Introduction to Economics
Multiple Choice
Which of the following is an example of an excise tax imposed by the government?
A
A tax on imported goods
B
A tax on gasoline
C
A tax on property value
D
A tax on personal income
Verified step by step guidance1
Step 1: Understand the definition of an excise tax. An excise tax is a tax imposed on the sale or production of a specific good or service, often a per-unit tax rather than a tax on overall income or property value.
Step 2: Review each option and classify the type of tax it represents. For example, a tax on imported goods is typically a tariff, a tax on property value is a property tax, and a tax on personal income is an income tax.
Step 3: Identify which option fits the excise tax definition. Since excise taxes are usually applied to specific goods like gasoline, tobacco, or alcohol, a tax on gasoline is a classic example of an excise tax.
Step 4: Confirm that the tax on gasoline is a per-unit or percentage tax applied directly to the product, distinguishing it from broader taxes like income or property taxes.
Step 5: Conclude that among the given options, the tax on gasoline is the correct example of an excise tax imposed by the government.
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