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Economics (AS & A Level) · Oct / Nov 2025 · Paper 13 · Question 25

9708Fiscal policy

A government reduced the tax on company profits from 28% to 20%. Which statement best describes this policy?

  1. AIt is both a contractionary fiscal policy and a supply-side policy.
  2. BIt is both an expansionary fiscal policy and a supply-side policy.
  3. CIt is both an expansionary fiscal policy and an expansionary monetary policy.
  4. DIt is both an expansionary monetary policy and a supply-side policy.

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Correct answer: B. It is both an expansionary fiscal policy and a supply-side policy.

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