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As part of fiscal policy, the government increased an indirect tax rate. This raised the product’s final price and reduced demand. Which dimension of the business environment is illustrated?

Answer and explanation

Correct answer: Economic dimension

Fiscal policy, including changes to tax rates, is an economic policy. The higher indirect tax raises the price paid by consumers, which can reduce demand; this example therefore illustrates the economic dimension.

Related tags

Business EnvironmentEconomic DimensionFiscal PolicyDimensions Of Business EnvironmentBusiness StudiesClass 12 Mcq

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