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Economics · May / June 2020 · Paper 11 · Question 18

2281Economic growth

The government wishes to increase economic growth in its economy. What would not be likely to achieve this aim?

  1. AThe central bank encourages bank lending.
  2. BThe central bank lowers interest rates.
  3. CThe government increases sales tax (VAT).
  4. DThe government subsidises new industries.

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Correct answer: C. The government increases sales tax (VAT).

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