Economics GCSE

Taxation and subsidies

What Taxation and subsidies means in Economics GCSE, as defined for AQA.

Definition of Taxation and subsidies

Check what you remember

Read the wording for your board, then hide it and explain Taxation and subsidies in your own words. Rough notes are fine. This is a self-check, with no mark or grade.

Reference: AQA

Indirect taxes increase production costs to internalise negative externalities, while subsidies lower prices to encourage consumption of goods with positive externalities.

AQA · Policies to correct positive and negative externalities

Topics that use Taxation and subsidies

Policies to correct positive and negative externalities (AQA GCSE)

Related terms

Using Taxation and subsidies in the exam

Check the command word and mark scheme for your exact question. After comparing your explanation with the reference, use the term in an answer on the linked topic. This practice does not predict an exam mark.

Practise Economics questions

Create a free account to answer exam-style questions on this topic and get feedback on your answers.

Start free

A week of Premium from your first lesson · Then the free plan continues · No card, no charge

All Economics GCSE terms