A Lower Real Interest Rate Typically Induces Consumers To

question 43

Multiple Choice

A lower real interest rate typically induces consumers to:

• A) Save more
• B) Buy fewer imported goods
• C) Purchase more goods that are bought using credit
• D) Purchase fewer goods that are bought without using credit

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Definitions:

Excise Tax

A tax levied on specific goods or activities, such as alcohol, tobacco, and gasoline, often intended to discourage their use or to raise revenue.

Sales Tax

A tax imposed by governments on the sale of goods and services, adding on to the purchase price paid by consumers.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Regressive

Relating to a taxation mechanism where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income earners.