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ECS1601 ASSESSMENT 2 2024 Which of the following statements is/are correct with regard to value added tax (VAT)? a. VAT is only levied on a few goods. b. VAT is selective tax and excise duty. c. VAT is the general tax and excise duty. d. VAT is levi$3.00
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ECS1601 ASSESSMENT 2 2024 Which of the following statements is/are correct with regard to value added tax (VAT)? a. VAT is only levied on a few goods. b. VAT is selective tax and excise duty. c. VAT is the general tax and excise duty. d. VAT is levi
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Course
Economics IB - ECS1601 (ECS1601)
Institution
University Of South Africa (Unisa)
ECS1601 ASSESSMENT 2 2024
Which of the following statements is/are correct with regard to value added tax
(VAT)?
a. VAT is only levied on a few goods.
b. VAT is selective tax and excise duty.
c. VAT is the general tax and excise duty.
d. VAT is levied on most goods and services.
Wh...
Started on Thursday, 25 July 2024, 8:37 AM
State Finished
Completed on Thursday, 25 July 2024, 9:20 AM
Time taken 42 mins 29 secs
Grade 18.00 out of 18.00 (100%)
Question 1
Complete
Mark 1.00 out of 1.00
Which of the following statements is/are correct with regard to value added tax
(VAT)?
a. VAT is only levied on a few goods.
b. VAT is selective tax and excise duty.
c. VAT is the general tax and excise duty.
d. VAT is levied on most goods and services.
a. b and d
b. a, b and c.
c. b, c and d
d. d
VAT is levied on most goods and services.
Question 2
Complete
Mark 1.00 out of 1.00
Which of the following elements are regarded as government intervention?
a. Taxation and borrowing only.
b. Spending, borrowing and taxation.
c. Spending and taxation only.
d. Spending, interest rate and borrowing.
The elements of government intervention are spending, taxation, and
borrowing.
a. The difference between government spending and borrowing is called the
budget deficit.
b. If government finances part of its spending from borrowing from the central
bank, this is called inflationary financing.
c. Expansionary fiscal policy implies that taxes must increase, and government
spending must be limited.
a. All statements are correct.
b. a and b
c. b and c
d. a
e. b
Your answer is correct.
The budget deficit refers to the difference between government spending and
current revenue of the government, see section 3.2. See section 3.5 on fiscal
policy.
The tax and income of two South African households, A and B, are as follows:
Household A Household B
Income (R) 5 000 1 500
PAYE (R) 1 500 200
VAT-Paid on Goods (R) 300 300
Tax Paid on Fuel (R) 800 600
According to the table, which of the following is correct?
(i) PAYE is a progressive tax,
(ii) VAT is a progressive tax.
(iii) Taxes on fuel are regressive taxes.
a. (i) and (ii) are correct.
b. (ii) and (iii) are correct.
c. (i) and (iii) is correct.
d. (i), (ii) and (iii) are correct.
e. (iii) is correct.
To answer this question, the student needs to compare the percentage of the
income that is taxes in the respective households.
Percentage of Tax = (Taxable Income/Total Income)*100
As a result, the shares of PAYE, VAT & Taxes on fuel are:
% of PAYE = (Total PAYE Paid/Total Income)*100
% of VAT = (Total VAT Paid/Total Income)*100
% of Taxes on Fuel = (Total Fuel Taxes Paid/Total Income)*100
Given the above, we can see that the PAYE is progressive tax. VAT and fuel are
regressive taxes.
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