O-LevelEconomicsGovernment and the macroeconomy2281/11 · May/June 2012 · Q231 Mark

What would be most likely to reduce the rate of inflation?

Aan increase in direct taxes

Ban increase in government expenditure

Can increase in indirect taxes

Dan increase in the budget deficit

✓ Correct answer

A: an increase in direct taxes

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Topic: Government and the macroeconomy, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2012 Paper 1 Variant 1, question 23.

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