Question

Which of these would most likely occur if the government increased taxes to build up its supply of cash?

Answer 1

.  Consumption of goods would decrease.

Answer 2

The correct answer to this open question is the following.

What would most likely occur if the government increased taxes to build up its supply of cash is "consumption of goods would decrease."

The US government has the faculty at all moments to increases taxes. At the federal, state or local government, it could make the decision when it considers it necessary. But the government authorizes an increase in taxes it is very ae¿ware that it is affecting the economy of the citizens. Disposable income will decrease if people have to pay more taxes. If this happens, people are going to but just the basic things for daily living, instead of generating more consumption in entertainment, leisure, vacation, restaurants, affecting other industries as well.