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Cambridge IGCSE Economics practice

Paper 2 structured question: Fiscal policy

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4

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Fiscal policy

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Paper 2Structured Questions4 marks

A recent study shows that higher taxes on businesses have led to reduced investment in the economy.

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Effects of Business Taxation

Businesses are cutting back on expansion plans due to increased tax burdens.

  1. a

    Explain how higher business taxes can affect overall economic growth.

    Aim for approximately 4 distinct marking points.

    [4]

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Paper 2 structured question: Fiscal policy

Paper 2Structured Questions1 marks

Description

Impact of Luxury Goods Taxation

The new tax is expected to raise prices for consumers and reduce demand for luxury items.

  1. a

    State one effect of this tax on consumers.

    Aim for approximately 1 distinct marking point.

    [1]