Answer to Question #338849 in Macroeconomics for Nana

Question

Discuss the fuel tax increase impact the economic growth of S.A

Answer 1

When gasoline prices increase, a larger share of households' budgets is likely to be spent on it, which leaves less to spend on other goods and services. The same goes for businesses whose goods must be shipped from place to place or that use fuel as a major input (such as the airline industry).