hmm, both answers seem right, but i think it's because the purpose of the tax was for the redistribution of income? so it's more directly linked rather than RBA trying to minimise inflation by raising interest rates.
What would be the effect of extending the Goods and Services Tax to currently non-taxed areas of expenditure?
a) It would reduce inflationary pressures
b) It would reduce distortion in the allocation of resources
c) It would lead to an increase in government spending on essential services
d) It would increase pressure to raise interest rates
I don't even get what the question is talking about, I mean .. what does non-taxed areas of expenditure?? and distortion in the allocation of resources??