Economic Incentives for Business Expansion

Steps:

• Identify cost-reducing factors: low interest rates ease borrowing, low profit taxes retain more earnings.
• Assess demand boosters: high consumer confidence signals spending, low unemployment reflects strong labor market and growth.
• Compare options: favorable conditions combine low costs with high demand to spur enterprise.
• Select option aligning all positives.

Why C is correct:

• Low rates and taxes cut business costs while high confidence and low unemployment drive demand, per supply-demand equilibrium encouraging investment.

Why the others are wrong:

• A: High rates and taxes raise costs, offsetting confidence despite unemployment.
• B: High rates and unemployment, plus low confidence, suppress investment beyond low tax benefit.
• D: Low confidence curbs demand, limiting enterprise despite low rates, taxes, and unemployment.

Final answer: C