In January 2013, the Portuguese Government raised tax rates. After three months, it reduced spending on health care and education. In the period between these two changes, unemployment in Portugal increased.
(a)[2]
What does the term ‘tax’ mean?
(b)[4]
Explain two reasons why a rise in unemployment may lower tax revenue.
(c)[6]
Analyse two reasons why unemployment may rise.
(d)[8]
Discuss whether a cut in government spending on education will reduce living standards.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “money paid to government” …