Indonesia has abundant resources, including raw materials such as copper, gold and coal. Indonesia is the second-largest coal exporter. In 2015, the Indonesian Government was thinking about raising subsidies for producers, farmers included. Subsidies may be used to bring inflation down. In recent years, direct taxes have been lower in Indonesia, whereas some other countries have raised indirect taxes.
(a)[2]
Which measure is used to calculate a country’s inflation rate?
(b)[4]
Explain two reasons why resources ought to be conserved.
(c)[6]
Analyse how subsidies to farmers might improve living standards.
(d)[8]
Discuss whether an increase in indirect taxes will reduce economic growth.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “CPI / RPI or a suitable index” …