If Congress Were to Pass a Law Exempting Interest on Saving

question 114

Multiple Choice

If Congress were to pass a law exempting interest on saving from taxation, the

• A) supply of loanable funds would decrease and the equilibrium interest rate would rise.
• B) supply of loanable funds would increase and the equilibrium interest rate would fall.
• C) demand for loanable funds would increase and the equilibrium interest rate would rise.
• D) equilibrium interest rate would be unaffected.

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Definitions:

Stratospheric Ozone

A layer of ozone molecules located in the Earth's stratosphere, protecting life by absorbing most of the sun's harmful ultraviolet radiation.

UVB

Ultraviolet B light, a component of sunlight with wavelengths between 280-315 nm, known for its role in vitamin D synthesis and skin tanning.

CFCs

Chlorofluorocarbons, compounds that were widely used as refrigerants and aerosol propellants but are harmful to the ozone layer.

Sulfur Oxides

Compounds formed from the combination of sulfur and oxygen, often produced by burning fossil fuels, and are significant contributors to pollution and acid rain.