Question

Help please! If the federal government wants to encourage businesses and consumers to spend more money, it would MOST LIKELY

a. increase the tax rate.
b. decrease the tax rate.
c. increase the reserve requirement.
d. decrease government spending on goods and services.

Answer 1

If the federal government wants to encourage businesses and consumers to spend more money, it would most likely "decrease the tax rate" since this would allow people to have more money to spend on goods and services.

Answer 2

Answer;
If the federal government wants to encourage businesses and consumers to spend more money, it would most likely "decrease the tax rate" since this would allow people to have more money to spend on goods and services.

Step-by-step explanation;
Decreasing tax encourages business and consumers to spend more money.
A tax decrease will increase disposable income because it leaves household with more money. On the other hand a tax increase will decrease disposable income, because it takes money out of households.
Disposable income is the main factor driving consumer demand, which accounts for two-thirds of total demand.