The imposition of high income tax by government to cut down demand is known as

Assessment: WAEC SSCE - Economics - 1988 (Objective) Subject: Economics

Question 1 Report

The imposition of high income tax by government to cut down demand is known as
Answer Details
The imposition of high income tax by the government to cut down demand is known as Fiscal Policy. Fiscal policy is a tool used by the government to regulate the economy by adjusting government spending and taxation. In this case, the government is using taxation to reduce the disposable income of individuals and households, which will ultimately lead to a reduction in their demand for goods and services. This is done in order to control inflationary pressures in the economy and promote economic stability.
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