One policy that would increase the saving rate would be

Question

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Taxing consumption would create an incentive for individuals to save more, as the cost of consuming would increase. This policy would encourage individuals to postpone consumption and save their money instead. Raising taxes on the returns to investment or saving would discourage individuals from investing or saving and ultimately decrease the saving rate. Similarly, raising taxes on saving would discourage individuals from saving.

One Policy That Would Increase the Saving Rate Would Be