Economics 2281 · O Level · Fiscal policy

Fiscal policy — practice question

A worker has an annual income of $\$40{,}000$ and is charged $20\%$ income tax. He buys electrical goods costing $\$5{,}000$ and a car costing $\$10{,}000$, with $20\%$ sales tax paid on both purchases. What total indirect tax does he pay?

  • A$\$3{,}000$
  • B$\$5{,}000$
  • C$\$8{,}000$
  • D$\$11{,}000$

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