Questions: Output via Governm... Reducing taxes will likely increase which of the following? interest rates . consumption population unemployment

The answer is consumption.

Reducing taxes does not directly affect interest rates. Interest rates are primarily influenced by central bank policies, inflation expectations, and overall economic conditions.

Reducing taxes increases disposable income for individuals and businesses. With more disposable income, people are likely to spend more on goods and services, thereby increasing consumption. This is supported by the Keynesian economic theory, which suggests that lower taxes can stimulate demand and economic activity.

Tax reductions do not have a direct and immediate impact on population size. Population changes are influenced by factors such as birth rates, death rates, and migration patterns, which are not directly related to tax policies.

While reducing taxes can potentially lead to job creation and lower unemployment in the long run by stimulating economic growth, it is not a direct or immediate effect. The primary direct effect of tax reduction is an increase in disposable income, which leads to higher consumption.