If the Government Wanted to Give People a Negative Direct

question 5

Multiple Choice

If the government wanted to give people a negative direct incentive not to save money,what would be the appropriate policy?

• A) providing individuals a subsidy to save their money
• B) providing funding for an advertising campaign encouraging people to spend more money
• C) informing individuals that saving money causes people not to spend money,which will cause them to lose their jobs
• D) imposing a tax on individuals for saving their money
• E) informing consumers about all that they could buy with their money with the hope that they spend more

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Definitions:

Earnings Quality

An assessment of the true income generated by a company, gauging how accurately the reported income reflects the company's true earning power.

Deferred Tax Assets

Assets on a company's balance sheet that may be used to offset future tax liabilities.

IFRS

International Financial Reporting Standards, a set of global accounting guidelines for preparing financial statements.

Valuation Allowance

Valuation Allowance is an accounting procedure that reduces the value of a deferred tax asset if it is unlikely that the business will use the tax asset in the future.