Fiscal policy

Question 5

To address a widening structural budget deficit while protecting low-income households during a cost-of-living crisis, a government proposes a fiscal policy package:

Increase the tax-free personal allowance from £12,500 to £16,000.
Raise the basic rate of income tax from 20% to 24% (applicable on income above the personal allowance up to the higher-rate threshold).

Evaluate, with the use of one or more appropriate diagrams, whether a nation's macroeconomic performance would be enhanced by implementing this fiscal policy package.

[25]

Fiscal policy

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Question 5

To address a widening structural budget deficit while protecting low-income households during a cost-of-living crisis, a government proposes a fiscal policy package:

Increase the tax-free personal allowance from £12,500 to £16,000.
Raise the basic rate of income tax from 20% to 24% (applicable on income above the personal allowance up to the higher-rate threshold).

Evaluate, with the use of one or more appropriate diagrams, whether a nation's macroeconomic performance would be enhanced by implementing this fiscal policy package.

[25]

Fiscal policy

Question 5

Fiscal policy Questions

Fiscal policy

Question 5

Fiscal policy Questions