Which of the Following Is Not an Argument Against Reforming

question 17

Multiple Choice

Which of the following is not an argument against reforming the tax laws to encourage saving?

• A) A public budget surplus can raise national saving.
• B) The substitution effect of a higher return to saving may be about equal to the income effect of a higher return to saving.
• C) Low-income households save a larger fraction of their income than high-income households.
• D) Tax cuts might cause a budget deficit.

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