A Government Policy That Would Reduce the Saving Rate Is

question 30

Multiple Choice

A government policy that would reduce the saving rate is

• A)eliminating the social security system.
• B)giving tax breaks to increase the real return that savers receive.
• C)increasing the government budget surplus by cutting government spending.
• D)switching the tax system to tax consumption instead of income.

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Definitions:

Economic Profit

The balance remaining once total revenue is reduced by both obvious and hidden expenses.

Profit-maximizing Firm

A business whose goal is to produce a level of output at which profits are at their highest.

Purely Competitive

A market scenario where many competitors offer the same product or service, ensuring no individual entity controls the market prices or supply.

Total Profit

The total financial gain made by a business after subtracting all expenses from the total revenue generated from operations.