Suppose a country has a consumption tax that is similar to a state sales tax. If its government were to eliminate the consumption tax and replace it with an income tax that includes an income tax on interest from savings, what would happen?
a. There would be no change in the interest rate or saving.
b. The interest rate would decrease and saving would increase.
c. The interest rate would increase and saving would decrease.
d. None of the above is correct.
c
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Refer to the scenario above. The situation here is similar to that in a(n) ________
A) prisoners' dilemma B) zero-sum game C) ultimatum game D) symmetric game
Inflation
A. increases the real value of the debt. B. has no impact on the debt. C. decreases the real value of the debt. D. is always factored into any calculations of deficits or surpluses.
Which one of the following could cause an inflationary gap?
A. Net exports are decreasing. B. Price levels are too low. C. Government spending is too high. D. Unemployment occurs.
A decrease in price and an indeterminate change in quantity are consistent with a:
A. rightward shift in supply and a leftward shift in demand. B. leftward shift in demand and no shift in supply. C. leftward shift in supply and a rightward shift in demand. D. leftward shift in supply and no shift in demand.