What Is the Effect of an Increase in the Tax

question 22

Multiple Choice

What is the effect of an increase in the tax rate on interest income on the supply of and the demand for loanable funds?

• A) The supply curve shifts to the left, while the demand curve remains unchanged.
• B) The supply curve shifts to the right, while the demand curve remains unchanged.
• C) The supply curve remains unchanged, while the demand curve shifts to the left.
• D) The supply curve remains unchanged, while the demand curve shifts to the right.

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Definitions:

Weathering

The breakdown of rocks, soils, and minerals as well as artificial materials through contact with the Earth's atmosphere, waters, and biological organisms.

Fluid Pressure

The pressure exerted by a fluid at any given point within the fluid, dependent on the fluid's density and depth.

Differential Stress

The difference in magnitude of stress applied in varying directions within geological formations, influencing rock deformation.

Confining Pressure

The pressure applied equally on all sides of a rock or sediment body, typically due to the weight of overlying materials, affecting pore fluid pressure and rock deformation.