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Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 25

9708Fiscal policy

The government decides to raise the rate of value added tax (general sales tax). What does this suggest is the government's main macroeconomic objective?

  1. Ato reduce the budget deficit
  2. Bto reduce the inequality of income distribution
  3. Cto reduce the level of unemployment
  4. Dto reduce the rate of inflation

As printed in the paper

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Correct answer: A. to reduce the budget deficit

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