The government raises the income tax rate and lowers the rate of sales tax (VAT). Starting from the original equilibrium at $X$, which letter marks the new equilibrium point in the market for normal goods?
- AA
- BB
- CC
- DD
Economics 0455 · IGCSE · Fiscal policy
The government raises the income tax rate and lowers the rate of sales tax (VAT). Starting from the original equilibrium at $X$, which letter marks the new equilibrium point in the market for normal goods?