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IGCSE business

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Question:

Effects of an increase of indirect tax on a business

Author: Freya Watson



Answer:

Prices of goods in the shops would rise consumers may buy fewer items as a result and this will reduce the demand for products made by businesses however some products are necessities and won't impact the business, workers notice that their wages buy less in the shops so real incomes have declined, so businesses may be under pressure to raise wages which will force up the costs of making products


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