Suppose the government was to eliminate taxes on interest from savings.Which of the following statements is NOT consistent with economic theory?
A) People would save more as a result.
B) People would save less as a result.
C) The substitution effect of the policy induces people to save less.
D) The substitution effect of the policy induces people to save more.
Correct Answer:
Verified
Q8: Which statement is TRUE?
A) The nominal rate
Q9: Which of the following phrases refers to
Q10: Suppose that the government starts taxing interest
Q11: Suppose that in the first period,a woman
Q12: Suppose that in the first period,a woman
Q14: Which of the following makes it difficult
Q15: Assume that the nominal rate of interest
Q16: Assume that the nominal rate of interest
Q17: If banks raise nominal interest rates to
Q18: Suppose the government were to eliminate taxes
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