A-LevelEconomicsGovernment Microeconomic InterventionFeb/Mar 2024Paper 1 Q141 Mark
A country uses an income tax under which the first $10000 of income is tax-free, the next $20000 is taxed at 20% and any income over $30000 is taxed at a top rate of 40%. It also levies a sales tax of 10% on most products. Which combination of tax changes is most likely to create a more equal distribution of income in the country?
Aincome tax a higher tax-free allowance, sales tax a higher rate of tax
Bincome tax a higher top rate of tax, sales tax a lower rate of tax
Cincome tax a lower tax-free allowance, sales tax a higher number of exempt goods
Dincome tax a lower top rate of tax, sales tax a lower number of exempt goods
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of government microeconomic intervention within the Economicssyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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