Following a prolonged period of high inflation and emergency energy subsidies, a nation's public debt has risen to 95% of GDP, with a fiscal deficit of 7% of GDP. The government is debating whether to implement fiscal consolidation through a package of broad-based tax increases (such as corporate and progressive income taxes) or through deep cuts to public services and welfare benefits.
Evaluate the view that raising taxation is a more economically damaging method of reducing a fiscal deficit than cutting government expenditure.
245 exam-style questions on AQA A Level Economics 2.5 Fiscal policy and supply-side policies, covering 2.5.1 Fiscal policy and 2.5.2 Supply-side policies. Each one has a worked solution and a mark scheme showing where the marks go.