A Government Policy That Taxes Saving in Order to Discourage

question 38

Multiple Choice

A government policy that taxes saving in order to discourage saving and encourage spending will

• A)slow economic growth.
• B)speed economic growth.
• C)create a greater incentive for people to specialize.
• D)strengthen people's property rights.
• E)increase the growth rate of capital.

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Definitions:

Foreign Goods

Products that are produced in a different country than where they are sold or consumed.

Net Capital Outflow

The gap between nationals purchasing assets from abroad and foreigners investing in the nation's assets.

Loanable Funds

A term used in economics to describe the market where savers supply funds for loans to borrowers.

Net Capital Outflow

The imbalance between domestic individuals acquiring assets abroad and foreigners securing assets domestically.