If the government taxed away all profits in a market economy,the likely result would be ________.

Question

Quizplus · Accepted Answer

Taxing away all profits in a market economy would remove the incentive for resource allocation, as there would be no reward for taking risks and investing in profitable ventures. This would likely result in a decrease in innovation and investment, as individuals and companies would have little motivation to create and expand businesses. Additionally, without profits, businesses would have no means to reinvest in their own expansion, further reducing growth and economic efficiency.

If the Government Taxed Away All Profits in a Market