WAEC Economics 2020 Objective — Question 40

Question 40 of 50 from the West African Examinations Council (WAEC) Economics 2020 Objective paper, with the correct answer and a full explanation.

During inflation, the appropriate fiscal measure to adopt is to

A. increase indirect taxes
B. increase direct taxesCorrect
C. reduce personal income tax
D. increase government expenditure

Explanation

During inflation, increasing direct taxes reduces disposable income and spending power, helping to check inflation, unlike the other options which would worsen it.

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