Sia
Question
Statistics
Posted 7 months ago
What combination of income taxes, real interest rates, and investment spending is associated with lower rates of economic growth?
Choose 1 answer:
(A) Higher taxes, higher real interest rate, and lower investment spending
(B) Higher taxes, lower real interest rate, and higher investment spending
(C) Lower taxes, lower real interest rate, and lower investment spending
(D) lower taxes, lower real interest rate, and higher investment spending
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Answer from Sia
Posted 7 months ago
Solution by Steps
step 1
Identify the economic factors that typically lead to lower economic growth: higher income taxes, higher real interest rates, and lower investment spending
step 2
Match the identified factors with the provided answer choices to determine which combination is associated with lower economic growth
Answer
The correct answer is the combination that includes all the factors leading to lower economic growth: higher taxes, higher real interest rate, and lower investment spending.
A
Key Concept
Economic Growth Factors
Explanation
Higher income taxes can reduce disposable income and consumption, higher real interest rates can discourage borrowing and investment, and lower investment spending can lead to a decrease in capital formation, all of which are associated with lower rates of economic growth.
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