Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

A government chooses to obtain most of its tax revenue from indirect taxes. What would make this policy more effective?

  • Aan increasing trend towards bartering of goods
  • Bincreasing interest rates on household savings
  • Cincreasing occurrence of informal markets in the economy
  • Dplacing taxes on goods and services which have a price-inelastic demand

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