If tax reduction and simplification are effective, then:
A)real wages will increase as labour supply and labour demand increase.
B)saving and investment in new capital will increase.
C)interest rates will increase in financial markets and the demand for financial assets will fall.
D)fewer new firms will be established, since existing firms will make more profit.

Question

Quizplus · Accepted Answer

Tax reduction and simplification can lead to increased disposable income, encouraging saving and investment in new capital, which can stimulate economic growth.

If Tax Reduction and Simplification Are Effective, Then