If the Supply of Saving Is Not Perfectly Inelastic, Then

question 18

Multiple Choice

If the supply of saving is not perfectly inelastic, then substituting a value-added tax for an equal-yield general wealth tax will:

• A)decrease market equilibrium interest rates.
• B)increase the efficiency loss in labor markets.
• C)decrease the efficiency loss in labor markets.
• D)both (a) and (b) are correct.

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