Question

Suppose that the U.S. government began to pay for a portion of everyone's college education, and it paid for this by increasing taxes on business investment. How would this policy affect economic growth? A Increase economic growth B Decrease economic growth C. Not impact economic growth D We cannot tell

Answer 1

The correct answer is letter "B": Decrease economic growth.

Step-by-step explanation:

If the U.S. government imposes taxes on investments, entrepreneurs are more likely to be discouraged by this measure even if the sources collected from the levies will be destined for a cause such as education. As a result of lower investments, the country's output will decrease, thus, the economic growth will dwindle.