Which of the four government policies to stimulate saving is essential? That is, which policy can on its own, regardless of the other policies, determine the level of the national saving rate?
What will be an ideal response?
Reduce budget deficits. A higher tax on consumption will increase national saving only if the government doesn't spend all of the increased tax revenue. Tax incentives that reward private saving directly, or encourage private saving by increasing the return on assets, will raise national saving only if government spending is reduced to correspond to the decrease in tax revenues. If nothing is done to promote private saving, national saving can be raised by lowering the government's budget deficit.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Alcohol prohibition in the United States
A) abolished the production of liquor. B) abolished the consumption of liquor. C) abolished the distribution of liquor. D) accomplished all of the above. E) accomplished none of the above.
The demand for a product at a given time is defined as the
a. desire for it. b. sum spent on it. c. measure of total utility for it. d. amount that would be bought at various prices.
If marginal cost is less than average variable cost,
A. average variable cost is falling. B. average variable cost is constant. C. average variable cost is rising. D. there is no way to determine if average variable cost is falling, constant, or rising.