Question

What effect do tax incentives have on economic development?
A.
Tax incentives have no impact on economic development.
B.
Tax incentives only allow the rich to get richer and the poor to get poorer.
C.
Tax incentives encourage international trade of human or physical resources.
D.
Tax incentives only affect economic development when a nation creates an important technology.

Please select the best answer from the choices provided.

A
B
C
D

Answer 1

C

Tax incentives can attract investment, encourage exports and the movement of capital and labor, and thus promote international trade in goods, services and resources — supporting economic development.