Which of the following would likely increase private saving?
A)A consumption tax, but not expansion of means testing
B)Both expansion of means testing and a consumption tax
C)Expansion of means testing, but not a consumption tax
D)Neither expansion of means testing nor a consumption tax

Question

Quizplus · Accepted Answer

A consumption tax encourages saving by making consumption more expensive relative to saving. Expansion of means testing, which often involves providing benefits based on income levels, does not directly encourage saving and could discourage it by reducing disposable income for those not qualifying for benefits.

Which of the Following Would Likely Increase Private Saving