FISCAL POLICY

Jane earns 30,000 pesos a month and she pays 20% of taxes deducted from her income, while John earns 50,000 pesos a month and pays 15% deducted from his income. What kind of taxation system is in effect for both Jane and John?

• Regressive

• Progressive

• Proportional

• None of the above

During an economic recession as one of the devastating effects of the COVID-19 pandemic, implementing the appropriate fiscal policy is of utmost importance. In what ways should the government successfully enforce the policy?

• The government should keep the money in the fund reserve and spend only on emergencies.

• The households and businesses will be incentivize to purchase by reducing tax rates.

• Increasing tax rates will encourage the households to save their money in the bank and spend only when the prices dropped.

• All of the above.

Taxes are collected to be used for government expenditure. Which of the following scenarios show the best use of the national budget?

• Handing out financial aid and food supply to the citizens who were affected by the recent typhoon.

• Demolish informal settler communities to give way for the construction of expressways.

• Deposit 40% of the national budget on undisclosed investment fund.

• All of the above.

Indirect taxes are levied on products and passed onto the consumers. Such examples are income tax and property tax.

• TRUE

• FALSE

One of the government expenditures is made on investments such as roads, establishments and defense system. The purpose of these investments is to enhance productivity and promote economy.

• TRUE

• FALSE