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  • 24-09-2018
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What effect will the tax increase have on savings and investments in the economy

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saadhussain514
saadhussain514 saadhussain514
  • 30-09-2018

Answer

Increase in taxes will result in a decrease in savings and investment

Explanation

A government normally increases taxes to boost it's tax revenue but this also results in the decrease of savings and investments. Higher taxes leaves consumers with less disposable income which then discourages them from saving and investing.

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