Which of the following accurately explains how changes in taxation of households can contribute to the creation of shortages and/or surpluses? (1 point)

Question

Decreasing taxation of households can increase household income and contribute to a decrease in the demand for goods/services.
Decreasing taxation of households can increase the supply of goods/services and contribute to surpluses.
Increasing taxation of households can reduce the demand for goods/services and contribute to the creation of surpluses.
Increasing taxation can increase household income and contribute to the creation of surpluses.

Answer 1

Increasing taxation of households can reduce the demand for goods/services and contribute to the creation of surpluses.