Responses
The increased individual and corporate income taxes overheats the economy and increases inflation.
The increased individual and corporate income taxes overheats the economy and increases inflation.
The increase in individual and corporate tax rates as well as government spending cause a slow down in the private sector economy.
The increase in individual and corporate tax rates as well as government spending cause a slow down in the private sector economy.
Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.
Decreases in federal government revenue and increasing expenses cause large deficits and adds to the national debt, which put a strain on the economy.
Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.
1 answer
The correct response would be:
Individual and corporate tax rates increase while spending for social programs decreases, both of which would lead the economy to slow down or contract.
Contractionary fiscal policy, which involves increasing taxes or decreasing government spending, can lead to reduced economic activity. The decision to use such policy is often avoided as it may result in slower economic growth or contraction, which can be politically unpopular and have negative social impacts.
