Question

Under what circumstances would the government most like lower taxes

Answer 1

The options of the question are:

A) The federal government has a budget surplus.

B) Investment has risen rapidly.  

C) Consumer spending has decreased recently.

D) Government hiring has increased

The correct answer is C) Consumer spending has decreased recently.

The government most likely lower taxes when consumer spending has decreased recently.

If consumers have diminished their spending in the market, then the government can lower the taxes in order to reactive the economy. In the fiscal policy of the United States, there are three kinds of taxes. Sales taxes, the ones that are charged on any commercial transaction. Progressive taxes, like an individual income tax, and Regressive taxes, that resulted when the income is less.