Although Bulgaria is a member of the European Union (EU), its corporation tax rates are much lower than those in other EU member states. However, regulation imposed by the Bulgarian government has put off foreign investment in Bulgaria. In addition, Bulgaria’s economic growth rate has fallen in recent years, partly because its quantity of labour has been steadily declining.
(a)[2]
Define regulation in this context.
(b)[4]
Explain two reasons for a fall in the quantity of labour in a country.
(c)[6]
Analyse how differences in corporation tax rates between countries may influence multinational companies (MNCs).
(d)[8]
Discuss whether a fall in a country’s economic growth rate will damage its economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Government-imposed rules or laws” …