Impact of Taxes on Economy

The video tutorial discusses government taxation, focusing on personal, business, and spending taxes. It explains how changes in these taxes impact businesses and consumers. Personal taxes affect disposable income and business sales, business taxes influence company costs and profits, and spending taxes like VAT affect product demand. The video also covers the opposite effects when taxes decrease, leading to increased consumer spending and business growth.

What is one of the main reasons governments set taxes?

• To collect tax revenue

• To increase business profits

• To reduce public spending

• To control inflation

What is one potential use of tax revenue collected by the government?

• Increasing business profits

• Funding public services

• Controlling inflation

• Reducing consumer spending

Which of the following is a type of personal tax?

• Corporation tax

• Value-added tax

• Income tax

• Sales tax

Which type of tax is sometimes referred to as a transactional tax?

• Corporation tax

• Sales tax

• Income tax

• Value-added tax

What happens to consumer spending if income tax increases?

• It fluctuates

• It increases

• It remains the same

• It decreases

How does an increase in business taxes affect a company's profits?

• Profits fluctuate

• Profits remain the same

• Profits decrease

• Profits increase

What is the effect of increased VAT on product prices?

• Prices decrease

• Prices remain the same

• Prices increase

• Prices fluctuate

If personal taxes decrease, what happens to consumer disposable income?

• It fluctuates

• It increases

• It remains the same

• It decreases

What is the impact on business costs if business taxes decrease?

• Costs remain the same

• Costs fluctuate

• Costs increase

• Costs decrease

How does a decrease in VAT affect product demand?

• Demand fluctuates

• Demand increases

• Demand remains the same

• Demand decreases