A progressive income-tax rise finances additional benefits. Inequality falls, but some workers reduce overtime and administrative costs increase. Which conclusion is most accurate?
The policy has no opportunity cost because revenue rises
Lower inequality proves productive capacity has risen
Redistribution benefits should be weighed against possible weaker incentives and implementation costs
A progressive tax affects only firms, not households
30 exam-style questions on OCR GCSE Economics 3.5 Fiscal policy, covering 3.5.1 Government spending and revenue, 3.5.2 Budget balance, surplus and deficit, 3.5.3 What is fiscal policy, 3.5.4 Calculate effects of taxes and spending, 3.5.5 Analyse effects of taxes and spending, 3.5.6 Costs and benefits of fiscal policy, and 3.5.7 Redistributing income and wealth. Each one has a worked solution and a mark scheme showing where the marks go.