Author Question: The sales tax A) is not consistent with the benefits-received principle because low-income ... (Read 105 times)

Haya94 · **on:** Jun 29, 2018

The sales tax

A) is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.
B) is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
C) is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
D) is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.

Question 2

Which of the following is not one of the four main categories of spending identified by John Maynard Keynes?

A) government purchases B) transfer payments
C) planned investment D) consumption