Question

What are the most likely effects of this policy? Choose three correct answers.

Scenario: Country SC hopes to create change in its technology industry. To influence the industry, the government implements a new fiscal policy by lowering the corporate tax rate.

Responses

Businesses will likely invest more in the economy.
Businesses will likely invest more in the economy.

Businesses will likely pay workers less.
Businesses will likely pay workers less.

Businesses will likely hire more workers.
Businesses will likely hire more workers.

Businesses will likely invest less in the economy.
Businesses will likely invest less in the economy.

Businesses will likely earn higher profits

Answer 1

- Businesses will likely invest more in the economy.
- Businesses will likely hire more workers.
- Businesses will likely earn higher profits.

Brief rationale: Lower corporate taxes raise after‑tax returns, encouraging firms to expand investment and hiring, and directly increasing retained profits.