Which of the following would be a useful way to increase the saving rate?
A)Tax breaks to increase the real return that savers receive
B)Increasing taxes if Ricardian equivalence holds
C)Increasing government spending
D)Increasing taxes on capital goods

Question

Quizplus · Accepted Answer

Tax breaks can incentivize individuals to save more by increasing the real return they receive on their savings. This can be a useful way to increase the saving rate without relying on government spending or increasing taxes, which may not be politically popular choices. Increasing taxes on capital goods could potentially discourage savings, as it would make it more expensive for individuals to invest in these goods. Additionally, if Ricardian equivalence holds, increasing taxes would not necessarily lead to an increase in savings, as individuals may anticipate future tax increases and adjust their behavior accordingly.

Which of the Following Would Be a Useful Way to Increase