Jun earns £40,000 a year and spends £20,000 a year on goods and services, before any indirect tax is added. The government is choosing between two tax plans. Assume Jun's spending before tax is the same under both plans.
Table 1 shows the two tax plans.
| Plan | Income tax (direct tax) | Indirect tax on spending |
|---|---|---|
| X | 10% of income | 20% |
| Y | 15% of income | 5% |
Which plan would take the larger share of Jun's income in total tax, and what share would it take?
Plan X, which would take 20% of Jun's income
Plan Y, which would take 15% of Jun's income
Plan X, which would take 40% of Jun's income
Plan X, which would take 30% of Jun's income
75 exam-style questions on AQA GCSE Economics 2.1 Introduction to the national economy, covering 2.1.1a What an interest rate is, 2.1.1b Interest rates and consumer decisions, 2.1.1c Interest rates, producer decisions and calculations, 2.1.2a UK government revenue and spending, and 2.1.2b Direct, indirect and progressive taxation. Each one has a worked solution and a mark scheme showing where the marks go.