During 2023, India became the most populous country. This could influence the government’s macroeconomic aims. In 2018, the Indian Government reduced the nation’s corporation (corporate income) tax rate from 35% to 25%. From 2019 to 2022, India’s inflation rate averaged 6%. Some economists argued that, in order to meet its central inflation rate target, the government should reduce its spending.
(a)[2]
Identify two macroeconomic aims of government that could conflict with one another.
(b)[4]
Explain two reasons why a country may experience a high population growth rate.
(c)[6]
Analyse how a cut in the corporation (corporate income) tax rate can lead to economic growth.
(d)[8]
Discuss whether a decrease in government spending will reduce inflation.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “full employment” …