What Happens When Interest Income from Savings Is Taxed

question 28

Multiple Choice

What happens when interest income from savings is taxed

• A)For the poor people, more will be saved than without the tax to make up for what is lost in taxes.
• B)For the rich people, more will be saved than without the tax to make up for what is lost in taxes.
• C)For the rich people, less will be saved than without the tax since tax lowers the return on income.
• D)For the poor people, less will be saved without tax since tax lowers the cost of investment.

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Definitions:

Balanced Scorecard

A strategic planning and management system that organizations use to communicate objectives, align business activities to the vision and strategy, and monitor performance against strategic goals.

Strategic Priority

A focus on long-term goals that are deemed most important for an organization’s success and allocation of resources.

United States Environmental Protection Agency

A federal agency tasked with protecting human health and the environment by enforcing regulations based on laws passed by Congress.

Private Costs

Costs that are directly borne by the individuals or organizations engaging in an economic activity, excluding external effects.