When the government finances a shovel-ready project through taxes or borrowing, this will result in?

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Adrianna Hester

Business

6 February, 03:34

When the government finances a shovel-ready project through taxes or borrowing, this will result in?

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Israel · Answer 1

The result is higher taxes or interest rates, which will reduce private sector employment. Government raises finances through various sources including taxes or borrowing and also grants and loans among other sources. Taxes are the main source of government revenue levied to an individual or a business organisations. Higher taxes reduces the employment rate by private sector in a bid to maintain returns from their activities.