Since Fiscal policy is quite a large part of the syllabus and it appears in almost every past paper, it would be wise to do a lot of practice on this topic.
Therefore, could you please do the following question - to be handed in last lesson on Friday. This is particularly important for the few students who so far have not handed in either of the 2 previous fiscal policy questions,
Jan 02
At election times, some UK politicians propose a cut in the standard rate of income tax. Such a cut is likely to have implications for the economy as a whole.
a) explain why a decrease in the marginal rate of taxation is likely to lead to an increase in the size of the multiplier. (10)
b) discuss the likely effects of a cut in the rate of income tax on the UK economy. (15)
