A Tax on Interest Earned from Saving Is an Example

question 28

Multiple Choice

A tax on interest earned from saving is an example of a tax with a high deadweight loss because

• A)it compels retired individuals to rely more heavily on Social Security.
• B)it encourages people to consume less and save more for their future expenditures.
• C)doing so amounts to double taxation since savings often come from income that has already been taxed once.
• D)the savings that are taxed could have been spent on capital goods which will benefit society.

---

Definitions:

Centrifuged

The process of subjecting various materials or solutions to the force of a centrifuge to separate components based on density.

Reference Laboratory

A laboratory owned and operated by an organization outside the physician’s practice.

Morphology

The examination of the shape and configuration of living creatures and their unique structural characteristics.

Anticoagulant

A substance or medication that prevents blood from clotting, used in the treatment and prevention of blood clots.