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Economics (AS & A Level) · Feb / March 2025 · Paper 12 · Question 22

9708Fiscal policy

Which combination of fiscal policy measures will reduce both the inflation rate and income inequality?

  1. Adecrease direct taxes, decrease indirect taxes, increase subsidies on food and public transport
  2. Bdecrease direct taxes, increase indirect taxes, increase subsidies on food and public transport
  3. Cincrease direct taxes, decrease indirect taxes, increase subsidies on food and public transport
  4. Dincrease direct taxes, increase indirect taxes, decrease subsidies on food and public transport

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Correct answer: C. increase direct taxes, decrease indirect taxes, increase subsidies on food and public transport

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