A Sales Tax Is an Example of a Transaction-Based Tax

question 46

True/False

A sales tax is an example of a transaction-based tax.

---

Definitions:

Excise Tax

A specific tax levied on the sale of a particular good or service, typically to discourage its consumption or to raise revenue.

Cable TV

A system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables or digital light pulses through fiber-optic cables.

Perfectly Inelastic

A demand situation in which the quantity demanded does not change in response to a change in price.

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among entities in the economy.