The Interest Rate Is

question 33

Multiple Choice

The interest rate is

• A) a cost to both savers and borrowers.
• B) only a cost to savers.
• C) only a return to borrowers.
• D) both a cost to savers and a return to borrowers.
• E) both a return to savers and a cost to borrowers.

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Definitions:

Laffer Curve

A theoretical representation showing the relationship between tax rates and the amount of tax revenue collected by governments.

Tax Revenues

The income that is gained by governments through taxation.

Federal Deficit

The financial condition that occurs when the government's expenditures exceed its revenues in a given fiscal year.

Progressive Tax

A taxation system in which the tax rate increases as the taxable amount or income increases, commonly seen in income tax systems to ensure higher earners contribute a greater proportion of their income.