For what reason might the United States government raise taxes instead of borrowing money to pay for a new government service?
A. To avoid increasing the flow of money in the economy
B. To avoid having to change the federal interest rate
C. To demonstrate that people support the concept of taxation more than borrowing
D. To avoid paying interest on savings bonds
My answer is: C
I agree. But make sure your text also supports that answer.
It could also be D. Ms. Sue is right. Double-check your text.
it is the D
To determine the correct answer, let's analyze each option:
A. To avoid increasing the flow of money in the economy: This option suggests that raising taxes would be done to prevent an excessive increase in the money circulating in the economy. However, this logic doesn't necessarily align with the reason for raising taxes instead of borrowing money for a new government service.
B. To avoid having to change the federal interest rate: This option implies that the government would raise taxes to avoid the need to adjust the federal interest rate. While this could be a consideration, it's not necessarily the primary reason for raising taxes.
C. To demonstrate that people support the concept of taxation more than borrowing: This option suggests that the government might raise taxes instead of borrowing money to demonstrate public support for taxation. This could be a plausible reason as it showcases people's willingness to contribute through taxes rather than relying on borrowing.
D. To avoid paying interest on savings bonds: This option states that raising taxes would be done to avoid paying interest on savings bonds. However, this reasoning solely focuses on the specific aspect of saving bonds and doesn't consider other factors that might lead to raising taxes.
Considering the options provided, option C seems more rational as it relates to the broader public sentiment towards taxation. By raising taxes instead of borrowing money, the government can demonstrate that people prefer taxation as a means to fund government services. Thus, the correct answer is C.