Prices in Mexico have risen in recent years. Indirect taxes have also been increased. Bus fares and food have become more expensive. In 2015, the Mexican Government planned to reduce its spending by US$8.3 billion.
(a)[2]
Define ‘indirect taxes’ and give one example.
(b)[4]
Explain two causes of higher demand for bus transport.
(c)[6]
Analyse how lower government spending on education could lead to unemployment.
(d)[8]
Discuss whether a government ought to raise taxes on food.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A tax on spending whose burden can be passed to others” …