Suppose a Country Has a Consumption Tax That Is Similar

question 79

Multiple Choice

Suppose a country has a consumption tax that is similar to a state sales tax.If its government were to eliminate the consumption tax and replace it with an income tax that includes an income tax on interest from savings,what would happen?

• A)There would be no change in the interest rate or saving.
• B)The interest rate would decrease and saving would increase.
• C)The interest rate would increase and saving would decrease.
• D)None of the above is correct.

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Definitions:

Clamping Pressure

The force applied by a device to hold or secure objects tightly together, preventing movement or separation.

Allen Wrench

Hex-shaped wrenches designed to fit into recessed hex Allen screws.

Hex Drive

A tool or fastener interface characterized by a six-sided shape, commonly used for screws and bolts.

Impact Socket

A type of socket designed to withstand the high torque and vibration generated by an impact wrench, usually made from more malleable materials.