Question

The government often imposes high taxes so that the people purchase less. Why does it do so?

• A. To increase its revenue
• B. To store goods for future use
• C. To make the room for developmental projects
• D. To control excess money in the economy

Answer 1

The correct option is D To control excess money in the economy

To curb the excess money supply in the economy, the government imposes high taxes. This would prompt people to purchase less and cause a reduction in prices.