A-LevelEconomicsGovernment microeconomic intervention9708/12 · Feb/Mar 2021 · Q161 Mark
The government redistributes income by raising the top rate of income tax and using the money raised to finance additional benefits to students and the unemployed. Under which conditions will total spending in the economy increase the most? income elasticity of demand of top rate income taxpayers income elasticity of demand of students and the unemployed
A> 1, > 1
B> 1, < 1
C< 1, > 1
D< 1, < 1
✓ Correct answer
C: < 1, > 1
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