A transactions tax imposed on financial markets would

Question

Quizplus · Accepted Answer

The imposition of a transactions tax on financial markets would lead to an increase in the costs associated with trading financial assets. This would reduce market liquidity, as traders and investors would be discouraged from buying and selling assets as frequently. This reduction in market liquidity could have negative effects on financial markets, as it may reduce the efficiency with which prices reflect available information. Additionally, it may also reduce the hedging opportunities available to market participants, leading to increased risk in financial markets.

A Transactions Tax Imposed on Financial Markets Would