A _______ relationship exists between business taxes and investment spending.
A) negative
B) positive
C) secondary
D) constant

Question

Quizplus · Accepted Answer

A negative relationship exists between business taxes and investment spending, meaning that an increase in business taxes will lead to a decrease in investment spending. This happens because higher taxes lower the after-tax return on investment, making it less attractive for businesses to invest.

A _______ Relationship Exists Between Business Taxes and Investment Spending