Answer:
D. It acts as a stimulus to a market
Explanation:
Incentive may be an action, an item, or a situation that encourages someone to work harder, increase production, or do more. An incentive is, therefore, encouragement or motivation to get involved more.
In business, government incentives refer to actions that encourage businesses to increase production. Incentives encourage consumers to spend more money, thereby increasing the total demand for goods and services. Tax reduction is an example of government incentives. Reduced taxes increase people's disposable income, thereby encouraging them to spend more. Taxes are expenses to business; when they are reduced, business costs are reduced, which increases profits.
