Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
Romania’s indirect tax rate stood at 19% from 2017 to 2019. Romania also has a large share of foreign multinational companies (MNCs), particularly US MNCs. These MNCs have contributed to higher productivity in Romania and a lower unemployment rate. MNCs also provide benefits to their home countries.
(a)[2]
Define an indirect tax, with an example.
(b)[4]
Explain two benefits of MNCs to their home countries.
(c)[6]
Analyse how an increase in productivity can affect unemployment.
(d)[8]
Discuss whether a fall in a country’s unemployment rate will reduce poverty.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Indirect tax on goods and services / sales e.g. VAT, GST, tariffs” …