4a.

The Government and the Macro-economy - Government Policies

4.3 Fiscal policy
1. Identify one fiscal policy measure. (1) TB

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2. State two qualities of a good tax. [2] MJ2020/P22/Q4a

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3. Explain the difference between a progressive tax and a regressive tax. [4] FM2020/P22/Q5b

4. Explain the difference between a proportional income tax system and a progressive income tax
system. [4] ON2022/P22/Q3b

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5. Explain the difference between a direct tax and an indirect tax, giving an example of each. (4)
TB

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6. Explain two reasons why governments levy taxes. [4]

7. Analyse the reasons why governments impose taxes. (6) TB

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8. Explain how government spending on training may increase tax revenue in the long run. [4]

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9. Analyse the causes of an increase in a government’s tax revenue. [6]

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10. Analyse how fiscal policy can encourage firms to produce more. [6]

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11. Analyse policy measures a government could use to attract workers to return to their home
country. [6]

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12. Analyse how an increase in unemployment may affect the Nigerian government’s budget. [4]

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13. Analyse how a rise in a country’s retirement age is likely to affect its government’s budget. [4]

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14. Discuss whether or not immigration will increase a country’s budget surplus. [6]

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15. Analyse why Vietnam’s budget deficit may decline in the future. [4]

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16. Discuss whether a government should provide subsidies to families to spend on housing. [8]

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17. Discuss whether or not a government should reduce the amount of money it gives to each state
pensioner. [8]

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