gcse economics - tools of the trade: privatisation - case studies
FOUNDATION LEVEL
• Explain briefly what is meant by privatisation (3)
•
If the Royal Mail were to be privatised, what do you think would be the effect
of this on the industry and its customers? (8)
• Explain 3 reasons why a government imposes taxes (6)
•
In what ways could a rise in income tax affect individuals? (4)
Study the information below and answer the questions which follow.
Paul Jones is 20 years old and working away from home. He receives a wage
slip every week.
Gross Pay |
Income Tax |
National Insurance |
Other Deductions |
Net Pay |
£150 |
£25 |
£15 |
£10 |
£100 |
• How much does Paul Jones earn each week? (1)
• How much does he take home each week? (1)
• Explain why the government taxes income. (10)
HIGHER TIER
• Give one example of an indirect tax and one example of a direct
tax. (2)
•
Why do you think the chancellor increased cigarette tax, petrol tax, and
road tax?
•
Use economic reasoning in your answer. (4)
•
Consider the likely economic consequence of the decision to put up the price
of petrol by 4p per litre and road tax up by £5.00 (6)
•
Explain how an increase in government spending might affect the level of
aggregate demand in the economy. In your answer, you may wish to consider
the effects on employment, economic growth, inflation and the balance of
payments (10)
• Explain 4 reasons why a government imposes taxes. (8)
•
In what ways could a rise in direct tax affect:
1) Individuals (4)
2) Firms (4)
• List 3 features of a free market economy (3)
•
List 3 features of an economy with central planning (3)
•
In your opinion which type of system leads to the best allocation of resources?
Explain your answer. (10)
• Two possible ways of tackling the slow down in the economy’s
rate of growth are lowering interest rates and cutting taxation.
a) explain how each of these policies might work (10)
b) Which, in your opinion, is likely to be the more effective policy? Give
economic reasons for your answer. (5)
• In what ways could a strong £ and high interest rate policies
affect a car manufacturer in the UK (6)
•
In your opinion, should the government help the car industry in Britain?
Give economic reasons for your answer. (12)
• List 4 reasons why the government imposes taxes (4)
•
What do you understand by the term budget surplus? (2)
•
Why do you think that the government had a big budget surplus for the year
2000-2001? Explain your answer (8)
•
If you were the Chancellor of the Exchequer would you choose to spend or
save he surplus? You should consider both possibilities and explain your
answer fully. (12)
• Changes in interest rates may be used to control inflation. Explain how a rise in interest rates might lead to a fall in inflation (8)
Explain the reasons why the employers and the trade unions were angry at the government’s refusal to cut interest rates throughout most of 2000 (10)
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley Keep Up-todate with your GCSE Economics - Subscribe Free to Economics in the News by Email
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