Answer to Question #182347 in Macroeconomics for Leah

Question

Which one of the following statements is correct :

(a). An increase in expenditure for healthcare that is financed from moving funds from the education budget will increase the budget deficit.

(b). A decrease in the number of items exempted from VAT will increase the budget deficit.

(c). A decrease in VAT from 15% to 14% will increase the budget deficit

(d). An increase in the corporate income tax rate will increase the budget deficit

Answer 1

(c). A decrease in VAT from 15% to 14% will increase the budget deficit