Question

if expansionary taxation policies are left unchecked, which is the most likely result?
○ reduced profits
○ high inflation
○ reduced production
○ reduced disposable income

Explanation:

Expansionary taxation policies (like tax cuts) increase disposable income and aggregate demand. If unchecked, increased demand without matching supply growth can drive up prices, leading to high inflation. Reduced profits, production, or disposable income contradict the effects of expansionary taxation (they'd relate to contractionary or other policies).

Answer:

B. high inflation