A government raises taxes on gains from successful new firms and uses the revenue to fund training for low-income adults. Which evaluation is best?
Training only tops up their incomes each year, so the tax may reduce inequality with no cost to output
Training may lift their earnings permanently, but the tax may weaken the incentive to start new firms
Training may lift their earnings permanently, and the tax will not affect incentives as only successful firms pay it
Training may lift their earnings permanently, but the tax is regressive because firms pay it rather than workers
76 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.