Suppose that a person in the United States earns $5,000 and faces an income tax rate of 25 percent. If that person saves $2,000 and invests it at 12 percent then he or she will pay
A) more in taxes than if there had been no saving.
B) less in taxes because of the saving.
C) tax only on the income spent.
D) tax only on the amount saved.
Correct Answer:
Verified
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