What are the disadvantages and advantages of economic growth?
GRUBBES Pros - Higher income tax SO less of a budget deficit, more public funding which could increase AS and reduce Y inequality Evaluate: Laffer curve, LT increase, little evidence it does (depends on what type of G) Pros - Reduces unemployment Evaluate: But it increases inflation, also depends how growth generated (INDIA - CAPITAL; CHINA - LABOUR) Cons - Environment degradation (China) so negative externality Evaluate: Can internalize it through higher taxes CONCLUSION: COMETS
AC
Related Economics A Level answers
All answers ▸Explain how a public good is different to a private good.
Discuss the impact that Brexit may upon the UK economy (25 marks)
Outline the effects of a lump-sum tax on companies selling cigarettes and who ends up bearing the burden of the tax. You should assume that there was previously no taxation in this market.
What are the likely impacts of a sustained budget deficit for an economy?