Which of the Following Is Not Correct

question 173

Multiple Choice

Which of the following is not correct?

• A) American families save a larger fraction of their incomes than their counterparts in many other countries such as Germany and Japan.
• B) Saving is an important long-run determinant of a nation's standard of living.
• C) A change in tax laws that encouraged greater saving would lower interest rates.
• D) Taxes on interest income can substantially decrease the future value of current saving.

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Definitions:

Incremental Sales

Additional sales generated by a specific business activity or decision, beyond what would have occurred normally.

Operating Expenses

Expenses incurred from the normal operations of a business, excluding the cost of goods sold.

After-Tax Discount Rate

The interest rate used in discounted cash flow analysis that accounts for the impact of taxes on the rate of return.

Income Tax Rate

The share of an individual's earnings that is paid to the government as a tax.