Which of the Following Is Not an Argument by Those

question 33

Multiple Choice

Which of the following is not an argument by those who oppose tax-law changes to encourage saving?

• A)Saving is not very responsive to changes in the tax rate.
• B)Saving is not an important determinant of a nation's ability to produce output.
• C)Reducing the budget deficit instead of changing the tax laws could raise saving.
• D)Changes in the tax laws to induce saving would distribute the tax burden less fairly.

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Definitions:

Discount Rate

The discount rate that is used to compute the present value of forthcoming cash flows.

Annual Payments

Recurring payments made once a year.

Compounded Monthly

Determining interest on a monthly schedule by including both the initial principal and previously earned interest in the calculation.

Mortgage

A loan secured by real property, typically a residential property, where the borrower is obliged to pay back with a predetermined set of payments.