Increases in either interest rates or taxes tend to
A) indicate governmental expansion of the economy.
B) signal the trough of a recessionary market.
C) contract the level of economic activity.
D) increase the level of business investment.

Question

Quizplus · Accepted Answer

Increases in interest rates or taxes generally lead to a contraction in economic activity as they reduce consumer spending and business investment.

Increases in Either Interest Rates or Taxes Tend to