In 2026, the government of Laurentia announced a major restructuring of its fiscal policy. Under the new package, the main rate of corporation tax on corporate profits was cut from 35% to 24%, while the top marginal rate of personal income tax was reduced from 50% to 42%.
Evaluate the likely effectiveness of cutting direct tax rates as a supply-side policy to stimulate long-run economic growth.
52 exam-style questions on Edexcel A A Level Economics 2.6 Macroeconomic objectives and policies, covering 2.6.1 Possible macroeconomic objectives, 2.6.2 Demand-side policies, 2.6.3 Supply-side policies, and 2.6.4 Conflicts and trade-offs between objectives and policies. Each one has a worked solution and a mark scheme showing where the marks go.