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O-LevelEconomicsGovernment and the macroeconomy2281/12 · May/June 2023 · Q171 Mark

A government decides to leave direct taxes unchanged but to increase indirect taxes. What is this policy intended to achieve?

Ato increase the value of the exchange rate
Bto redistribute income from higher to lower income groups
Cto reduce a budget deficit
Dto reduce the rate of inflation

✓ Correct answer

C: to reduce a budget deficit

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About this question

Topic
Government and the macroeconomy, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source
O-Level Economics, May/June 2023 Paper 1 Variant 2, question 17.

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