GOVERNMENT BASICS
The group of people with authority to make and enforce laws and policies in a country.
What is government?
A tax taken directly from income or wealth before the person receives it.
What is a direct tax?
What happens to consumer spending when income tax increases?
Consumer spending decreases.
The clearing of large areas of trees.
What is deforestation?
Money given by government that does not have to be repaid.
What is a grant?
Government decisions about taxation and public spending.
What is fiscal policy?
A tax paid through higher prices when goods or services are purchased.
What is an indirect tax?
How does an increase in purchase tax affect demand?
Demand for goods decreases because prices rise.
Planting trees to replace those that were cut down.
What is reforestation?
Ongoing financial support such as tax breaks or cash assistance.
What is a subsidy?
Through fiscal policy.
How does government mainly influence the economy?
What is an ad valorem tax?
A tax charged as a percentage of the value of a product.
State ONE effect of an increase in corporation tax on businesses.
Reduced investment / higher prices / reduced employment / lower dividends.
Why is environmental protection important for tourism in the BVI?
It protects ecosystems that attract tourists.
What is advisory or technical assistance?
Free or low-cost expert advice provided by government.
Why is security of the state important for tourism and investment?
Tourists and investors avoid unstable countries.
A tax levied on the profits of companies.
What is corporation tax?
How does taxation help control inflation?
It removes excess money from circulation.
Name ONE environmental law or policy.
Plastic bag bans / fuel taxes / marine park protection / zoning laws.
Why does government provide utilities and infrastructure?
Businesses cannot operate efficiently without water, electricity, and transport.
Give ONE example of security of the state in the BVI.
Royal Virgin Islands Police Force / courts of justice / defense services.
An indirect tax collected at each stage of production and distribution.
What is Value Added Tax (VAT)?
How can taxation protect local industries from foreign competition?
By making imported goods more expensive so local goods are more attractive.
Give ONE example of renewable energy encouraged by government.
Solar energy / wind power / tidal energy.
Why does government support infant industries?
To help new businesses become established and competitive.