The Federal Goods and Services Tax

Multiple Choice

The federal goods and services tax

A) is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
B) is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
C) is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.
D) is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.