A higher cost of living in your state means you will pay more for housing, goods, and services.
What happens when living costs are too high?
When the cost of living rises, the amount of money that can be spent by individuals will decrease, and they will not be able to purchase high-end goods but will instead look forward to lower-quality alternatives. The money the government gets from the GST will go down as people stop buying as many goods.
What drives up living expenses?
The quantity of a good that is available is called the supply, and demand is the amount that people want. Prices can be set by how these two things relate to one another. In some situations, these two variables can raise the cost of living, but they usually have opposite effects.
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