Paper 2 · International Trade
A benefit of economic growth to a country's government is that
Athe country no longer needs to import any capital goods
Bthe exchange rate is fixed permanently against the dollar
Ca wider tax base lets it fund schools, clinics and roads
Dthe government is relieved of the duty to provide services
Explanation: A larger national output means more income, profit and spending to tax, so revenue rises without rates having to be raised. Government can then finance education, health, water and roads out of revenue rather than by borrowing.
Derived from ZIMSEC Economics 4050/2 Paper 2, June 2023, Q2