In January 2013, the Portuguese Government raised tax rates. Three months later, it reduced spending on health care and education. Unemployment in Portugal increased between those two periods.
(a)[2]
What does the term ‘tax’ mean?
(b)[4]
Explain two reasons why a rise in unemployment may lower tax revenue.
(c)[6]
Analyse two reasons why unemployment might rise.
(d)[8]
Discuss whether lower government spending on education will reduce living standards.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “a payment of money to the government or local authority” …