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If the economy is growing too rapidly,

would it be better for Congress to raise
taxes slightly or lower taxes slightly?

User Killah
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1 Answer

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Answer:

Primarily through their impact on demand. Tax cuts boost demand by increasing disposable income and by encouraging businesses to hire and invest more. Tax increases do the reverse. These demand effects can be substantial when the economy is weak but smaller when it is operating near capacity.

Step-by-step explanation:

User Mariea
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