Economics 9708 · AS & A Level · Taxes and subsidies

Taxes and subsidies — practice question

Some of the widest income gaps in the world are found in countries in South East Asia. Which policy could governments in South East Asia use to cut income inequality in the short run?

  • AIncrease the general sales tax / VAT rate on luxury goods.
  • BIntroduce a minimum wage.
  • CInvest heavily in schools and education programmes.
  • DStimulate economic growth through skills and productivity training.

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