(a)[2]
Identify two kinds of cost a firm faces.
(b)[4]
Explain two functions of commercial banks for firms.
(c)[6]
Analyse the causes of differences in income levels between countries.
(d)[8]
Discuss whether low tax rates help an economy.
Economics 0455 · IGCSE · Differences in economic development between countries
Differences in economic development between countries — practice question
Liechtenstein is a high-income economy in the centre of Europe. Because the country has low tax rates and limited regulation, it is an appealing location for foreign firms and individuals to set up bank accounts. Production costs for firms in Liechtenstein are high, but this is partly balanced by low indirect taxation.