Optional25 marks
Case study · The UK economy
Evaluate microeconomic and macroeconomic policies that could be used to reduce inequality in the UK.
Specification point 4.5.2 · Theme 4
Taxation
Role of the state in the macroeconomy · A global perspective
Questions tagged to this specification point
12 questions
Essay questions
Long-form evaluation and discussion
Optional25 marks
Case study · The UK economy
Evaluate the likely microeconomic and macroeconomic effects of tax cuts in the UK.
Optional25 marks
ContextIn 2018, the United States Government cut the corporation tax rate (tax on company profits) from 35% to 21%. Income tax rates for US citizens were also reduced: for example, the top rate of income tax was cut from 39.6% to 37%.
Evaluate the likely impact of cutting tax rates as a policy to increase economic growth.
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Optional25 marks
Case study · Markets for food and drinks high in fat, salt or sugar (HFSS)
Evaluate the likely microeconomic and macroeconomic effects of imposing a tax on HFSS foods.
Optional25 marks
Case study · The UK economy
With reference to the information provided and your own knowledge, evaluate the microeconomic and macroeconomic effects of a government policy of cutting public expenditure rather than raising taxes as a means of reducing a fiscal deficit.
Data-response questions
Questions built around exam extracts
5 marks
Case study · The German economy
With reference to Figure 1, explain the distinction between direct and indirect taxation.
5 marks
Case study · The UK economy
With reference to Figure 4 and your own knowledge, explain the distinction between a progressive and a regressive tax.
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8 marks
Case study · The UK economy
With reference to Figure 4 and Extract A, examine the likely impact of the ‘freeze in income tax thresholds’ (Extract A line 1) on aggregate demand.
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12 marks
Case study · UK Government spending and inequality
With reference to Extract C and your own knowledge, discuss methods the UK government could use to increase tax revenue.
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Short-answer questions
Focused calculations, explanations and diagrams
2 marks
ContextThe UK Government is planning to cut the rate of corporation tax on all pre-tax profits of companies to 17% by 2020.
If a company makes £500 000 pre-tax profit in 2020, calculate how much corporation tax it will pay. Assume that the government cuts the rate of corporation tax as planned.
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2 marks
ContextThe UK Government is planning to cut the rate of corporation tax on all pre-tax profits of companies to 17% by 2020.
Explain one possible reason why the revenue from corporation tax could increase if the government cuts the rate of tax.
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Multiple-choice questions
Quick checks of economic understanding
A-level Paper 2, June 2019, Q5(c)Multiple choice
1 mark
ContextAccording to the charity Oxfam, the combined wealth of the 62 richest people in the world is the same as the wealth of the poorest half of the world’s population. The value of the combined wealth of the poorest half of the world’s population has fallen by 38% between 2010 and 2016.
Which one of the following would be most likely to reduce a country’s Gini coefficient? An increase in:
Aimport tariffs
Bprogressive taxes
Cregressive taxes
Dvalue added tax
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