Economics (AS & A Level) · Oct / Nov 2021 · Paper 11 · Question 30
9708Fiscal policy
The government wishes to increase aggregate demand. Which actions would be most likely to succeed?
- Aa reduction in income tax and an increase in interest rates
- Ba reduction in income tax and an increase in production subsidies
- Can increase in corporate tax and an increase in government spending
- Dan increase in value added tax (sales tax) and a reduction in government spending
As printed in the paper
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Correct answer: B. a reduction in income tax and an increase in production subsidies
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