For This Question,assume That a Country Experiences a Permanent Reduction

question 47

Multiple Choice

For this question,assume that a country experiences a permanent reduction in its saving rate.Which of the following will occur as a result of this reduction in the saving rate?

• A)a permanently slower growth rate of output
• B)no permanent effect on the level of output per capita
• C)a permanently lower level of output per worker
• D)both A and B
• E) both B and C

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Definitions:

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a higher burden on lower-income earners relative to their income.

Income Groups

Categories of people classified according to the level of their income, often used in socio-economic and market research to analyze spending habits, needs, and trends.

Lump-Sum

A single payment made at a particular time, as opposed to a series of smaller payments or installments.

Tax System

The structured way in which taxes are levied in a country, including the collection, management, and expenditure of taxed income.