Economics 9708 · AS & A Level · Taxes and subsidies

Taxes and subsidies — practice question

(a)[8]

Explain the reasons governments levy taxes and consider if an increase in income tax is fairer than an increase in sales taxes.

(b)[12]

Assess whether a government ought to try to balance its budget at all times instead of running a budget surplus or a budget deficit.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: AO1: A thorough grasp of the different possible reasons governments impose taxes.

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