O-LevelEconomicsThe basic economic problem2281/11 · May/June 2014 · Q31 Mark

What is most likely to reduce the supply of factors of production in an economy?

Aincreasing the age of retirement

Bintroducing new methods of irrigation

Clowering the cost of borrowing from banks

Draising the rate of tax on profits

✓ Correct answer

D: raising the rate of tax on profits

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Topic: The basic economic problem, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2014 Paper 1 Variant 1, question 3.

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