Tajikistan is among Asia’s low-income economies. Its currency, the somoni, has the main features of money. More than one million Tajik workers are employed overseas, mainly in Russia. In 2020, the Tajik government feared that the country might enter a recession, which could lead to lower tax revenue. Even with this risk, some Tajik firms purchased new capital equipment.
(a)[2]
Identify two reasons why tax revenue is likely to decrease during a recession.
(b)[4]
Explain two characteristics of money.
(c)[6]
Analyse the advantages an economy may gain when some of its citizens work in other countries.
(d)[8]
Discuss whether consumers would or would not benefit from firms buying new capital equipment.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Reduced incomes and jobs cut income tax revenue” …