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The Diagram Below Show the Market for Financial Capital Assuming

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The diagram below show the market for financial capital assuming that national income is constant at potential GDP,Y*. The diagram below show the market for financial capital assuming that national income is constant at potential GDP,Y*.   FIGURE 25-2 -Refer to Figure 25-2.Suppose national saving is reflected by NS<sub>0</sub> and investment demand is reflected by I<sub>0</sub><sup>D</sup>.Now suppose the government implements a revenue-neutral tax policy that encourages investment.What is the effect on the quantity of national saving? A) There is no effect on NS or I<sup>D</sup> and the quantity of national saving supplied remains at I*. B) National saving shifts to   ,and the quantity of national saving supplied rises to I<sub>2</sub>. C) Investment demand shifts to I<sub>1</sub><sup>D</sup> and the quantity of national saving supplied rises to I<sub>1</sub>. D) Investment demand shifts to I<sub>1</sub><sup>D</sup>,national saving shifts to NS<sub>1</sub>,and the quantity of national saving rises to I<sub>3</sub>. E) National saving shifts to   ,investment demand shifts to I<sub>1</sub><sup>D,and the quantity of national saving rises to </sup> <sup> </sup>   . FIGURE 25-2
-Refer to Figure 25-2.Suppose national saving is reflected by NS0 and investment demand is reflected by I0D.Now suppose the government implements a revenue-neutral tax policy that encourages investment.What is the effect on the quantity of national saving?

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