Which of the Following Would Not Be a Result of Replacing

question 202

Multiple Choice

Which of the following would not be a result of replacing the income tax with a consumption tax so that interest income was not taxed?

• A)The interest rate would decrease.
• B)Investment would decrease.
• C)The standard of living would eventually rise.
• D)The supply of loanable funds would shift right.

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Definitions:

Straight-Line Depreciation

A process for determining depreciation by uniformly distributing an asset's cost across its lifespan.

Residual Value

Residual value is the estimated value of an asset at the end of its useful life, reflecting what it could be sold for or its scrap value.

Double-Declining Balance

An accelerated method of depreciation that doubles the regular depreciation approach, resulting in larger depreciation expenses in the initial years of an asset's life.

Units-Of-Output

A method of depreciation that allocates the cost of an asset over its useful life based on the number of units it produces.