Gasoline taxes are usually used in part to finance the road and ...

[eruditmonkey@yahoo.com]

Gasoline taxes are usually used in part to finance the road and highway repair and new construction. Which principle of taxation does this type of tax most fit and why?
 
  What will be an ideal response?

Question 2

If the final expressions in a present value equation used to calculate the price of a bond you are considering buying are 50 / (1 + .08)3 + 500 / (1 + .08)3, which of the following is correct?
 
  A) The coupon is 50, the interest rate you need is 1.08 percent, and the coupon will mature in 3 years.
  B) The face value is 50, the interest rate you need is 8 percent, and the coupon will mature in 3 years.
  C) The face value is 500, the coupon is 50, and the coupon will mature in 3 years.
  D) The face value is 500, the interest rate you need is 3 percent, and the coupon will mature in 8 years.

[zogaridan]

Answer to Question 1

This tax fits under the benefits-received principle of taxation. Presumably those who buy gasoline are also those who are using the roads and highways. Therefore, the tax is being levied on those who use the good or get a benefit from it.

Answer to Question 2

C

[eruditmonkey@yahoo.com]

Great answer, keep it coming

[kishoreddi]

Excellent