Economics Multiple Choice Question – 3 April 2022

A government decreases the tax rate on goods and services and increases the tax rate on incomes.

What is the likely outcome on the distribution of income and the incentive to work?

Select ONE answer:

1. distribution of income – less equal & incentive to work – decreased
2. distribution of income – less equal & incentive to work – increased
3. distribution of income – more equal & incentive to work – decreased
4. distribution of income – more equal & incentive to work – increased

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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