An increase in the personal income tax rate on interest income will
A. increase desired saving because the expected real after-tax interest rate falls.
B. decrease desired saving because the expected real after-tax interest rate falls.
C. increase desired saving because the expected real after-tax interest rate rises.
D. decrease desired saving because the expected real after-tax interest rate rises.
Answer: B
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M2 ________
A) does not include currency B) does not include traveler's checks C) is a broader measure of money than M1 D) does not include checking deposits held at credit unions
Currency traders expect the value of the dollar to fall. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market?
A) Demand for dollars will decrease, and supply of dollars will decrease. B) Demand for dollars will increase, and supply of dollars will decrease. C) Demand for dollars will increase, and supply of dollars will increase. D) Demand for dollars will decrease, and supply of dollars will increase.
Consider the same monopoly situation as in the previous question. The deadweight loss associated with this monopoly is
a. 966 b. 1,058 c. 2,484 d. 3,680
A command economic system does not need to be concerned with what to produce, how to produce things, or who will get the goods and services produced
a. True b. False