Question

The tax rates are to control an excessive rise in the price of goods and services.

• A. decreased
• B. increased
• C. kept unchanged
• D. abolished

Answer 1

The correct option is B increased

The rise in prices is known as inflation. It makes goods and services expensive and impacts the standard of living of people. To control this situtation, the government increases the tax rate. This reduces the purchasing power of the people and they buy less, thereby reducing the demand for goods and services. This leads to a fall in prices.