| A | B |
|---|
| What are the two policy tools of Fiscal Policy? | Taxation and Government Spending |
| In a boom, is the government likely to decrease or increase income tax? Why? | Increase; consumer income will decrease so spending will decrease. |
| Which products/services are more likely to be affected by increases in income tax rises? | Luxuries |
| What is the main level of corporation tax? | 30% |
| To reduce demand in the economy, should the government increase or decrease its spending? Why? | Decrease. This will decrease the demand for goods and services. |
| How will higher rates of corporation tax impact on businesses? | Less profits |
| What will be the impact of higher VAT? | Higher prices |
| An example of government infrastructure | Schools |
