A Flat-Rate Tax on Comprehensive Consumption

question 17

Multiple Choice

A flat-rate tax on comprehensive consumption:

• A)will reduce the market rate of interest.
• B)will reduce net interest received by savers in any given year.
• C)will not result in any difference between the gross interest rate paid by borrowers and the net interest rate received by savers.
• D)causes no loss of efficiency in labor markets.

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Definitions:

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