A VAT (Value Added Tax)

question 126

Multiple Choice

A VAT (value added tax) :

• A)Is regressive in its effect.
• B)Has not proved popular outside of the U.S.
• C)Is not a tax on consumption.
• D)Is used exclusively by third world (less developed) countries.
• E)None of the above.

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Definitions:

Inventories

The total amount of goods and materials held by a company or business in anticipation of sale or completion.

Income-Expenditure Model

A relationship that shows how much people plan to spend at each income level; this model identifies, for a given price level, where the amount people plan to spend equals the amount produced in the economy.

Real GDP

Represents the total economic output of a country, adjusted for inflation, thereby providing a more accurate reflection of an economy's size and growth.

Aggregate Expenditure

The total amount of spending in an economy, including consumption, investment, government, and net export expenditures.