Identify Cause and Effect As you read the section "The Importance of National Taxes," consider what might happen if the government cut taxes drastically.

Less revenue for government, Increase in money supply,

Explanation:

First, a drastic cut in taxes will lower government revenue, making it difficult to operate as they once did. For example, there may be limited funds to complete ongoing and new projects.

Secondly this would impact the total money in circulation allowing more disposable income for individuals which could either affect the economy positively or negatively as the case may be.