Hi there, I have a few last minute questions to ask. I know time is a bit short now but would really appreciate it if anyone could answer my questions. 1. Since we are in a recession at the moment, why has the government increased taxes? As mentioned in the notes, during a recession, an expansionary fiscal policy might be used which means increasing spending and reducing taxation. I understand that this is theoretical and in real life, many other complications would arise but it bugs me that I don't understand what is happening around me.. 2. When an exam question says "Explain the differences between...", is it alright to draw up a table comparing the two things being compared and list the differences in point form is time is running short? 3. As the general rule is not to use tippex in exams, is it okay to use tippex when drawing curves. Sometimes, it is easy to make a mistake when drawing in a curve (especially with indifference curves and complicated MDS, LSAS, SRAS curves - eg. effect of price increase on substitution and income effect.). Also, are we encouraged to use different colours when drawing the curves in the exams? Thank you.
1. There are a few things to note here. Firstly the government did reduce taxes a while ago - it lowered VAT from 17.5% to 15%. Secondly, note that the increases in taxation announced in the budget won't be effective immediately - hopefully we'll be out of the recession by the time they come into effect. Also, the increases in taxation are necessary in order to fund all the extra government spending. So you're right that reducing taxation is one way to try and help move out of recession and the government did this. The increases in tax should come after the economy has recovered (to some extent at least) and these will be used to meet the (massively) increased spending (that was also to help move out of the recession). 2. Bullet points are fine, although each bullet point should probably be a full sentence. I'd avoid tables, although if you're short of time, then just do whatever you can! 3. I think different colours are a good idea. One way to side-step the tippex issue completely is to draw your diagrams in pencil. If you have time, you can go over them in pen.
Thank you for your answers, how freaky that the long essay question was actually related to my first question
