Question

Why does the government get involved in taxing, borrowing and spending? 1 point

Answer 1

Answer:

The correct choice is A. The government gets involved in taxing, borrowing and spending to influence business or economic activity.

Explanation:

The primary purpose of taxes is to generate revenue for the governance of the state. On a secondary level, the government also uses tax to encourage or discourage certain kinds of businesses, and stimulate economic growth thereby creating employment. In carrying out its Fiscal Duties as mentioned above, the principles of taxation require the government to be fair in how it collects taxes. That is, those who have more should pay more than those who earn less.    

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