Suppose a Country Has a Consumption Tax That Is Similar

question 79

Multiple Choice

Suppose a country has a consumption tax that is similar to a state sales tax.If its government were to eliminate the consumption tax and replace it with an income tax that includes an income tax on interest from savings,what would happen?

• A)There would be no change in the interest rate or saving.
• B)The interest rate would decrease and saving would increase.
• C)The interest rate would increase and saving would decrease.
• D)None of the above is correct.

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Definitions:

Mutual Agreement

An understanding or contract reached between two or more parties, often formalized by a document, indicating a concurrence of wills or intentions.

Accord And Satisfaction

A contractual agreement where a dispute is settled by the parties involved agreeing to give and accept something of value in resolution.

Condition

A stipulation or prerequisite in a contract or agreement that must be met for the agreement to be fully enforceable.

Off-campus Neighborhoods

Residential areas located outside the boundaries of a college or university campus, often inhabited by students.