Mr Dodd Resides in a State with a 6% Sales

question 76

Multiple Choice

Mr. Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy a sailboat and paid that state's 4% sales tax. Which of the following statements is true?

• A) Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture.
• B) Mr. Dodd does not owe a use tax to his home state.
• C) Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture.
• D) None of the above is true.

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Definitions:

Contractionary Policy

Economic policy measures aimed at reducing spending or increasing taxes to slow down an overheating economy.

U.S. President

The U.S. President is the head of state and head of government of the United States, and is responsible for the executive branch of the federal government.

Real Wages

Wages adjusted for inflation, representing the purchasing power of income earned from labor.

Labor Markets

The supply and demand for labor, where employers seek to hire workers and workers seek employment.