What would NOT result from replacing the income tax with a consumption tax?
A) The interest rate would decrease.
B) Investment would decrease.
C) The standard of living would eventually rise.
D) The supply of loanable funds would shift right.

Question

Quizplus · Accepted Answer

Replacing the income tax with a consumption tax encourages savings and investment, as it shifts the tax burden from income to spending. This would likely increase investment rather than decrease it, as people would have more incentive to save and invest their money rather than spend it.

What Would NOT Result from Replacing the Income Tax with a Consumption