Questions: The government intentionally influences markets by
balancing company budgets
changing the tax rate
awarding large business contracts
Transcript text: The government intentionally influences markets by
balancing company budgets
changing the tax rate
awarding large business contracts
Solution
Answer
The answer is changing the tax rate.
Explanation
Option 1: Balancing company budgets
The government does not typically balance company budgets directly. Companies are responsible for managing their own budgets. The government may influence company finances indirectly through regulations, subsidies, or tax policies, but it does not directly balance their budgets.
Option 2: Changing the tax rate
Changing the tax rate is a direct method by which the government can influence markets. By altering tax rates, the government can affect consumer spending, business investment, and overall economic activity. For example, lowering taxes can increase disposable income for consumers and reduce costs for businesses, potentially stimulating economic growth.
Option 3: Awarding large business contracts
While awarding large business contracts can influence specific companies or industries, it is not a broad market influence tool like changing the tax rate. Government contracts can provide significant revenue to businesses, but this action is more targeted and does not have the widespread market impact that tax rate changes can have.