Economics (AS & A Level) · Feb / March 2021 · Paper 12 · Question 16

The government redistributes income by raising the top rate of income tax and using the money raised to finance additional benefits to students and the unemployed. Under which conditions will total spending in the economy increase the most?

1. A> 1 ; > 1
2. B> 1 ; < 1
3. C< 1 ; > 1
4. D< 1 ; < 1

As printed in the paper