Economic Lowdown Audio Series-Fiscal Policy
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How do higher income taxes typically affect the economy?
Higher income taxes result in household and business having less income, which encourages more spending.
Higher income taxes result in household and business having less income, which discourages spending.
Higher income taxes result in household and business having more income, which encourages more spending.
Higher income taxes result in household and business having more income, which discourages more spending.



Answer :

Final answer:

Higher income taxes typically lead to reduced income for households and businesses, which in turn discourages spending in the economy.


Explanation:

Higher income taxes typically affect the economy by resulting in households and businesses having less income, which discourages spending. When income taxes are higher, individuals have less disposable income, leading to reduced spending and investment. This can have implications for economic growth and overall consumer behavior.


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