What would happen to investment if the government were to increase the tax on interest income?
A)investment spending would fall
B)investment spending would rise
C)investment would be unaffected
D)investment could rise, fall or remain unchanged

Question

Quizplus · Accepted Answer

Increasing the tax on interest income would reduce the return on investment, making investment less attractive. As a result, individuals and businesses would be less likely to invest, leading to a decrease in investment spending.

What Would Happen to Investment If the Government Were to Increase