1.Most eurozone countries with large deficits are using VAT to generate revenue.'

(Irish Tax Institute, The Irish Times, November 2011)

(i) Explain, using examples, the difference between direct taxes and indirect taxes.

(ii) Discuss the economic advantages and disadvantages for the Government of

increasing VAT rates instead of income tax rates in its most recent budget.

(iii) Outline how imposing a tax on sugary foods (e.g. fizzy drinks) could benefit the

Irish econom

2. (i) Discuss three economic factors which affect the competitiveness of Irish firms in

international trade.

(ii) Outline how international trade benefits Irish consumers. (25)

(c) 'Euro area growth is forecast to slow down from 1.6% in 2011 to 0.2% in 2012'.

(OECD, 2011)

Discuss the possible effects on the Irish economy of the slowdown in the growth rate in the

euro area.

3. he economist John Maynard Keynes, author of The General Theory of Employment, Interest

and Money (1936), supported the use of fiscal policy by Government to create full employment.

(i) Explain the above statement.

(ii) Discuss two other key concepts which Keynes contributed to economic thought.