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A Consumption Tax Is Likely to Increase Savings as Long

Question 92

Multiple Choice

A consumption tax is likely to increase savings as long as individuals:


A) choose to consume more, even though the lower tax on savings makes them less wealthy.
B) choose to consume less, even though the lower tax on savings makes them wealthier.
C) choose to retire later, so that their pension funds are taxed less severely.
D) choose to transfer balances from saving accounts with no tax advantages into tax- favored investments.

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