Which of the following correctly examines how changes in government tax policies on households can impact private enterprise? (1 point)

Question

Decreasing taxes on households can increase the amount of money they have to spend on goods and services.
Increasing taxes on households helps businesses by decreasing the wages they pay their workers.
Increasing taxes on households reduces the amount of revenue coming into the government.
Decreasing taxes on households increases the cost of production paid by businesses.

Answer 1

The option that correctly examines how changes in government tax policies on households can impact private enterprise is:

Decreasing taxes on households can increase the amount of money they have to spend on goods and services.

When taxes on households are decreased, individuals typically have more disposable income, which can lead to increased consumer spending. This increase in demand for goods and services can be beneficial to private enterprises, as it may result in higher sales and potentially more investment and hiring.