Taxation And Purchasing Power Quiz

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  • 1/30 Questions

    Major highways, expressways, and flood control projects are undertaken by which government agency?

    • Department of Public Works and Highways
    • Department of Trade and Industry
    • Department of Budget
    • Department of Agriculture
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About This Quiz

This quiz explores the relationship between taxation, purchasing power, and economic fundamentals like inflation, unemployment, and income metrics.

Taxation And Purchasing Power Quiz - Quiz

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  • 2. 

    A farmer is looking for work in winter when there is little work on the farm. What type of unemployment is this?

    • Cyclical

    • Frictional

    • Seasonal

    • Structural

    Correct Answer
    A. Seasonal
    Explanation
    The correct answer is seasonal because the farmer is experiencing unemployment due to the seasonal nature of their work. In winter, there is little work available on the farm, leading to temporary unemployment for the farmer. This type of unemployment is directly related to the changing seasons and is a common occurrence in industries that rely heavily on seasonal work.

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  • 3. 

    Government agency tasked to assess and collect all national internal revenue taxes, fees and charges.

    Correct Answer
    Bureau of Internal Revenue,BIR,B.I.R.
    Explanation
    The correct answer is Bureau of Internal Revenue (BIR). The BIR is a government agency responsible for assessing and collecting all national internal revenue taxes, fees, and charges. They ensure that individuals and businesses comply with tax laws and regulations, and they play a crucial role in generating revenue for the government to fund public services and projects. BIR is commonly referred to as BIR or B.I.R.

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  • 4. 

    What is the primary determinant of a person’s earning potential?

    • Education

    • Age

    • Sex

    • Race

    Correct Answer
    A. Education
    Explanation
    Education is the primary determinant of a person's earning potential because it equips individuals with the knowledge, skills, and qualifications necessary to secure higher-paying jobs. Higher levels of education often lead to better job opportunities, promotions, and increased earning potential. Education provides individuals with the necessary training and expertise to excel in their chosen fields, making them more valuable and marketable to employers. Additionally, education helps individuals develop critical thinking, problem-solving, and communication skills, which are highly valued in the workplace and can contribute to higher earnings.

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  • 5. 

    A ____________ is one that uses more than one means of propulsion - that means combining a petrol or diesel engine with an electric motor.

    • Hybrid vehicle

    •  electric vehicle

    • Truck

    • Jeep

    Correct Answer
    A. Hybrid vehicle
    Explanation
    A hybrid vehicle is a type of vehicle that combines both a petrol or diesel engine with an electric motor for propulsion. This means that the vehicle can use both traditional fuel and electricity to power itself, resulting in increased fuel efficiency and reduced emissions. This combination of different propulsion methods makes a hybrid vehicle more environmentally friendly and energy-efficient compared to vehicles that solely rely on petrol or diesel engines.

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  • 6. 

     A fee paid for some liberty or privilege of passing over a highway or bridge

    • Toll

    • Tax

    • Penalty

    • License fee

    Correct Answer
    A. Toll
    Explanation
    A toll is a fee that is paid in order to have the privilege of passing over a highway or bridge. It is a charge that is typically collected by the government or a private company to help maintain and improve the infrastructure. This fee is separate from taxes and is specifically related to the use of the road or bridge. It is not considered a penalty or a license fee, as those terms refer to different types of charges or fees.

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  • 7. 

    As to taxation this term basically means mandatory or obligatory, or required by law

    • Compulsory

    • Voluntary

    • Flexibility

    • Proportional

    Correct Answer
    A. Compulsory
    Explanation
    The term "compulsory" refers to something that is mandatory or required by law. In the context of taxation, it means that individuals or entities are obligated to pay taxes as per the laws and regulations set by the government. This term indicates that there is no choice or option to opt out of paying taxes, and failure to comply may result in penalties or legal consequences.

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  • 8. 

    It is  a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or other legal entity) by a governmental organization in order to fund various public expenditures

    Correct Answer
    tax,taxes
    Explanation
    The given answer explains that a tax is a compulsory financial charge imposed by a government on individuals or legal entities to generate revenue for public expenditures. This explanation highlights the purpose of taxes, which is to fund various government activities and services.

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  • 9. 

    It is a legal strategy that allows a national or local government to seize private property for public use. The seizing authority must pay fair market value for the property seized.

    • Eminent Domain

    • Police Power

    • Taxation

    • Repo

    Correct Answer
    A. Eminent Domain
    Explanation
    Eminent Domain is a legal strategy that grants a government the power to take private property for public use. This is typically done when the government needs the property for infrastructure projects such as building roads, schools, or parks. However, the government must compensate the property owner by paying fair market value for the seized property. This ensures that the property owner is not unfairly burdened by the loss of their property.

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  • 10. 

    Under-declaration of income earned is an example of:

    • Tax Evasion

    • Tax Avoidance

    • Tax Minimization

    • Special Assessment

    Correct Answer
    A. Tax Evasion
    Explanation
    Under-declaration of income earned refers to intentionally hiding or not reporting income to avoid paying taxes. This act is considered illegal and falls under the category of tax evasion. Tax evasion involves deliberate actions to evade or escape paying taxes by illegal means, such as hiding income, inflating deductions, or using offshore accounts. It is different from tax avoidance, which involves using legal methods to minimize tax liability. Tax minimization refers to legitimate strategies to reduce tax liability within the boundaries of the law. Special assessment is not related to the given scenario.

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  • 11. 

    Oplok was laid off from his factory job during the recession. What kind of unemployment is this?

    • Cyclical

    • Seasonal

    • Structural

    • Frictional

    Correct Answer
    A. Cyclical
    Explanation
    Oplok being laid off from his factory job during the recession is an example of cyclical unemployment. Cyclical unemployment occurs due to fluctuations in the business cycle, specifically during periods of economic downturns or recessions. During these times, businesses may reduce their workforce or shut down operations, leading to job losses. Oplok's job loss is a result of the recession, which is a macroeconomic phenomenon affecting the overall economy, hence categorizing it as cyclical unemployment.

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  • 12. 

    A tax whose burden of paying the tax is passed on to others

    • Indirect tax

    • Direct tax

    • Income tax

    • Withholding tax

    Correct Answer
    A. Indirect tax
    Explanation
    An indirect tax is a tax that is imposed on goods and services, but the burden of paying the tax is ultimately passed on to others, such as consumers or businesses. This means that the person or entity who initially pays the tax, such as a producer or retailer, can shift the cost of the tax onto others by increasing the price of the goods or services. Unlike a direct tax, which is directly paid by the person or entity on whom it is imposed, an indirect tax is indirectly paid by others. Examples of indirect taxes include sales tax, value-added tax (VAT), and excise tax.

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  • 13. 

    An ________ tax is an indirect tax on the sale of a particular good or service such as fuel, tobacco and alcohol, goods that have negative externalities or are non-essentials.

    • Excise

    • Income 

    • Tariff

    • Local 

    Correct Answer
    A. Excise
    Explanation
    An excise tax is an indirect tax imposed on the sale of specific goods or services that are considered non-essential or have negative externalities, such as fuel, tobacco, and alcohol. This type of tax is levied on the producer or seller of the goods, but the burden of the tax is often passed on to the consumer through higher prices. Excise taxes are commonly used to discourage the consumption of harmful or luxury goods and to generate revenue for the government.

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  • 14. 

    Taxpayers with annual taxable income of ______________ and below are exempted from paying personal income tax

    • 250,000

    • 25,000

    • 500,000

    • 100,000

    Correct Answer
    A. 250,000
    Explanation
    Taxpayers with annual taxable income of 250,000 and below are exempted from paying personal income tax. This means that individuals who earn less than or equal to 250,000 in a year do not have to pay any taxes on their income.

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  • 15. 

    A programmer quits his job to look for another. What type of unemployment is this?

    • Frictional

    • Srtuctural

    • Cyclical

    • Seasonal

    Correct Answer
    A. Frictional
    Explanation
    This is an example of frictional unemployment because the programmer voluntarily left his job and is actively searching for another one. Frictional unemployment occurs when individuals are in between jobs and are temporarily unemployed while they search for new employment opportunities.

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  • 16. 

    A tax on imported goods/commodities

    • Customs duties

    • Local tax

    • License fee

    • Ad valorem tax

    Correct Answer
    A. Customs duties
    Explanation
    Customs duties refer to taxes imposed on imported goods or commodities by the government. These taxes are levied at the time of importation and are intended to protect domestic industries and regulate international trade. Customs duties can vary depending on the type of goods being imported and are usually calculated based on the value or quantity of the goods. Therefore, customs duties are the correct answer as they specifically relate to taxes on imported goods.

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  • 17. 

    Unemployment caused by a recession is called:

    • Frictional

    • Cyclical

    • Structural

    • Seasonal

    Correct Answer
    A. Cyclical
    Explanation
    Cyclical unemployment refers to the type of unemployment that occurs as a result of fluctuations in the business cycle. During a recession, there is a decline in economic activity, leading to a decrease in demand for goods and services. This decline in demand causes businesses to reduce their workforce, resulting in job losses and cyclical unemployment. Therefore, the correct answer is cyclical as it specifically pertains to unemployment caused by a recession.

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  • 18. 

    Which of the following would be included as a member of the labor force?

    •  A full time college student.

    •  A recent high school graduate looking for a first job.

    • A homemaker contributing 15 hours per week as a volunteer worker in a hospital.

    •  A retired school teacher collecting social security benefits.

    Correct Answer
    A. A homemaker contributing 15 hours per week as a volunteer worker in a hospital.
    Explanation
    The homemaker who contributes 15 hours per week as a volunteer worker in a hospital would be included as a member of the labor force. This is because they are actively engaged in unpaid work for a specific number of hours per week. While the full-time college student, recent high school graduate, and retired school teacher are not currently participating in the labor force as they are not actively seeking employment or engaged in any form of work.

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  • 19. 

    When the aggregate supply of goods and services decreases because of an increase in production costs, it results in: 

    • Cost-Push Inflation

    • Demand-Pull Inflation

    • Deflation

    • Frictional Unemployment

    Correct Answer
    A. Cost-Push Inflation
    Explanation
    When the aggregate supply of goods and services decreases due to an increase in production costs, it leads to cost-push inflation. This occurs because the increase in production costs, such as wages or raw material prices, causes businesses to raise the prices of their goods and services in order to maintain their profit margins. As a result, consumers experience higher prices for goods and services, leading to inflationary pressures in the economy.

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  • 20. 

    Tukmol is not optimistic that he will find a job and stops actively seeking employment. What kind of unemployment is this?

    • Frictional

    • Seasonal

    • Structural

    • Cyclical

    Correct Answer
    A. Frictional
    Explanation
    This type of unemployment is called frictional unemployment. Frictional unemployment occurs when individuals are temporarily unemployed while they search for new job opportunities. In this case, Tukmol has stopped actively seeking employment because he is not optimistic about finding a job, which suggests a temporary situation where he is between jobs.

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  • 21. 

    What is inflation?

    • A measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year

    • What you do to a basketball.

    • The comparison of income versus the relative cost of a standard set of goods and services in different geographic areas.

    • The measure of how much money you need compared to previous years

    Correct Answer
    A. A measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year
    Explanation
    Inflation is a measure of the decrease in the value of money over time. It is expressed as a percentage reduction in value since the previous year. Inflation occurs when the general level of prices for goods and services rises, resulting in a decrease in purchasing power. This means that the same amount of money can buy fewer goods and services than before. Inflation is an important economic indicator as it affects the cost of living, interest rates, and overall economic stability.

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  • 22. 

    What is measured by comparing income to the relative cost of a standard set of goods and services in different geographic areas?

    • Purchasing Power

    • Pricing 

    • Inflation

    • Competition

    Correct Answer
    A. Purchasing Power
    Explanation
    Purchasing power is measured by comparing income to the relative cost of a standard set of goods and services in different geographic areas. This comparison helps determine the ability of individuals or households to buy goods and services, taking into account the differences in prices across regions. It provides insights into the affordability and standard of living in different areas, allowing for comparisons and analysis of economic conditions and disparities.

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  • 23. 

    It measures changes in the price level of market basket of consumer goods and services purchased by households

    • Consumer Price Index

    • Inflation

    • Purchasing Power

    • Gross National Product

    Correct Answer
    A. Consumer Price Index
    Explanation
    The Consumer Price Index (CPI) is a measure that tracks changes in the price level of a market basket of consumer goods and services that are commonly purchased by households. It reflects the average price changes over time and is used to measure inflation. By monitoring the CPI, policymakers and economists can assess the impact of price changes on the purchasing power of consumers. It is important in understanding the overall health of the economy and helps in making informed decisions regarding monetary and fiscal policies.

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  • 24. 

    Bisdak is an unemployed architect in California but there is a strong demand for architects in Texas. What type of unemployment is this?

    • Structural

    • Cyclical

    • Seasonal

    • Frictional

    Correct Answer
    A. Structural
    Explanation
    This is an example of structural unemployment because Bisdak is unable to find a job in his field of expertise due to a mismatch between the skills he possesses and the available job opportunities in his current location. The strong demand for architects in Texas suggests that there are job openings in the field, but Bisdak's unemployment is a result of the structural factors in the labor market rather than temporary or cyclical factors.

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  • 25. 

    When taxpayers structure their transactions, within the bounds of the law, to minimize tax payments they are engaged in:

    • Tax Avoidance

    • Tax Evasion

    • Fraud

    • Tax Exemption

    Correct Answer
    A. Tax Avoidance
    Explanation
    Tax avoidance refers to the practice of arranging one's financial affairs in a way that legally reduces the amount of taxes owed. It involves taking advantage of tax deductions, credits, loopholes, and other legitimate strategies to minimize tax payments. Taxpayers engage in tax avoidance to optimize their tax liability and maximize their after-tax income. Unlike tax evasion or fraud, tax avoidance is within the bounds of the law and does not involve illegal activities or misrepresentation of information.

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  • 26. 

    Which of the following are not covered by excise tax under TRAIN?

    • Bear Brand Milk

    • Nestea Iced Tea

    • Gatorade

    • Lipovitan

    Correct Answer
    A. Bear Brand Milk
    Explanation
    Bear Brand Milk is not covered by excise tax under TRAIN because it is classified as a basic necessity item. The excise tax under TRAIN primarily targets non-essential goods and services such as tobacco, sugary drinks, and petroleum products. Basic necessity items like milk are exempted from excise tax to ensure affordability and accessibility for the general public, especially for low-income households and children who rely on these products for their nutritional needs.

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  • 27. 

    ___________ are an additional type of tax you might have to pay in addition to normal real estate taxes for improvements that benefit your local area.

    • Special Assessment

    • Toll

    • License Fee

    • Tax Planning

    Correct Answer
    A. Special Assessment
    Explanation
    Special assessments are an additional type of tax that individuals may be required to pay in addition to regular real estate taxes. These assessments are specifically imposed to fund improvements that directly benefit the local area. Unlike regular real estate taxes, special assessments are levied for a specific purpose and are often used to fund infrastructure projects such as road repairs, street lighting, or park enhancements. Therefore, special assessments are a separate tax category that individuals may have to pay to support local improvements.

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  • 28. 

    Purchasing power is measured by

    • Income

    • Inlation

    • Comparing income to cost of living

    • Comparing inflation to income

    Correct Answer
    A. Comparing income to cost of living
    Explanation
    Purchasing power refers to the ability of an individual or household to buy goods and services. It is determined by comparing income to the cost of living. If the cost of living increases at a faster rate than income, purchasing power decreases as people are able to afford fewer goods and services. On the other hand, if income increases at a faster rate than the cost of living, purchasing power increases as people can afford more. Therefore, comparing income to the cost of living is the appropriate way to measure purchasing power.

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  • 29. 

    Workers at a steel plant are laid off because the economy is weak and the demand for products requiring steel has fallen. What type of unemployment best describes the workers?

    • Cyclical unemployment.

    •  Full unemployment.

    • Structural unemployment.

    • Frictional unemployment.

    Correct Answer
    A. Cyclical unemployment.
    Explanation
    The workers at the steel plant are laid off due to a weak economy and decreased demand for steel products. This type of unemployment is known as cyclical unemployment. Cyclical unemployment occurs when there is a downturn in the business cycle, leading to a decrease in demand for goods and services and subsequently causing layoffs. In this case, the workers' unemployment is directly related to the overall economic conditions, making cyclical unemployment the most appropriate classification.

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  • 30. 

    Frictional unemployment often occurs when:

    • The economy enters a recession.

    •  People first enter the labor force.

    • People are discriminated against.

    • People lose a job because their skills are no longer needed.

    Correct Answer
    A.  People first enter the labor force.
    Explanation
    Frictional unemployment often occurs when people first enter the labor force. This is because individuals who are new to the job market may take some time to find suitable employment that matches their skills and qualifications. They may need to search for job opportunities, attend interviews, and go through the hiring process, which can result in a temporary period of unemployment. This type of unemployment is considered natural and is typically short-term as individuals eventually find employment that aligns with their abilities.

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  • Mar 17, 2023
    Quiz Edited by
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  • Mar 16, 2019
    Quiz Created by
    Kit
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