O-LevelEconomicsGovernment and the macroeconomy2281/12 · May/June 2021 · Q181 Mark
A country is experiencing unemployment. It has a progressive income tax policy and benefits for the poor. The government aims to increase employment and reduce income inequality. Which fiscal policy measures are most likely to achieve these aims? [Table 18]
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Aincome tax: decrease the highest tax rate, benefits for the poor: decrease
Bincome tax: increase the highest tax rate, benefits for the poor: decrease
Cincome tax: decrease the lowest tax rate, benefits for the poor: increase
Dincome tax: increase the lowest tax rate, benefits for the poor: increase
✓ Correct answer
C: income tax: decrease the lowest tax rate, benefits for the poor: increase
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