If tax reduction and simplification are effective, then

Question

Quizplus · Accepted Answer

Tax reduction can provide individuals and businesses with more disposable income, which can encourage saving and investment in new capital. This, in turn, can lead to economic growth and an increase in labour demand and wages. Interest rates may not necessarily rise and it is not a necessary outcome for tax reduction and simplification to be effective. While government revenue may decrease in the short term, it is possible that it could increase in the long term due to a boost in economic activity. The establishment of new firms depends on various factors, and tax reduction and simplification may have both positive and negative impacts on entrepreneurship. Therefore, B is the best choice as it corresponds to a known positive outcome of tax reduction and simplification.

If Tax Reduction and Simplification Are Effective, Then