5.03 The Political Economy Exam Questions with
Answers
1. Why does the government need to collect taxes? correct answer: pay for
goods that won't be provided by the free market
2. Which of these is an example of a tax on consumption? correct answer:
cigarette tax
3. Which kind of tax is a sales tax? correct answer: consumption tax
4. What is the purpose of payroll taxes? correct answer: pay for specific social
programs
5. Which is an example of a property tax? correct answer: Which is an example of
a property tax?
6. What is a progressive tax? correct answer: a tax that charges
more for higher incomes a tax that charges more for higher incomes
7. Which of these increases the price of certain foreign-made goods?
correct answer: an import taritt
8. Which is the purpose of a retaliatory tariff? correct answer: engage in a
trade war
9. Which organization attempts to promote free trade around the
world? correct answer: World Trade Organization (WTO)
10. Choose the pair of phrases that correctly completes
this sentence correct answer: taxes are charged while tariffs are
charged . correct answer: internally; on imports
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Answers
1. Why does the government need to collect taxes? correct answer: pay for
goods that won't be provided by the free market
2. Which of these is an example of a tax on consumption? correct answer:
cigarette tax
3. Which kind of tax is a sales tax? correct answer: consumption tax
4. What is the purpose of payroll taxes? correct answer: pay for specific social
programs
5. Which is an example of a property tax? correct answer: Which is an example of
a property tax?
6. What is a progressive tax? correct answer: a tax that charges
more for higher incomes a tax that charges more for higher incomes
7. Which of these increases the price of certain foreign-made goods?
correct answer: an import taritt
8. Which is the purpose of a retaliatory tariff? correct answer: engage in a
trade war
9. Which organization attempts to promote free trade around the
world? correct answer: World Trade Organization (WTO)
10. Choose the pair of phrases that correctly completes
this sentence correct answer: taxes are charged while tariffs are
charged . correct answer: internally; on imports
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