A country experiences an increase in unemployment due to deficiency of aggregate demand. What will be the effect of this on tax revenue and government expenditure, assuming that tax rates and rates of unemployment benefit remain unchanged?

A.
B.
C.
D.
Economics
IGCSE&ALevel
CAIE
Exam No:9708_w24_qp_32 Year:2024 Question No:20

Answer:

A

Knowledge points:

5.2.1 meaning of government budget
5.2.6 distinction between expansionary and contractionary fiscal policy

Solution:

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