Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

The government wants to raise aggregate demand. Which measures would be most likely to achieve this?

  • Aa reduction in income tax and an increase in interest rates
  • Ba reduction in income tax and an increase in production subsidies
  • Can increase in corporate tax and an increase in government spending
  • Dan increase in value added tax (sales tax) and a reduction in government spending

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