Economics · May / June 2021 · Paper 12 · Question 18

A country is experiencing unemployment. It has a progressive income tax policy and benefits for the poor. The government aims to increase employment and reduce income inequality. Which fiscal policy measures are most likely to achieve these aims?

1. Adecrease the highest tax rate; decrease benefits for the poor
2. Bincrease the highest tax rate; decrease benefits for the poor
3. Cdecrease the lowest tax rate; increase benefits for the poor
4. Dincrease the lowest tax rate; increase benefits for the poor

As printed in the paper