Which of the Following Would Not Be a Result of Replacing

question 157

Multiple Choice

Which of the following would not be a result of replacing the income tax with a consumption tax so that interest income was no longer taxed?

• A)The interest rate would decrease.
• B)Investment would decrease.
• C)The standard of living would eventually rise.
• D)The supply of loanable funds would shift right.

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Definitions:

Functional Need

The basic or essential requirement that consumers seek to fulfill with a product or service, often related to its practical or utilitarian aspect.

High-Involvement

Pertains to purchase decisions that carry a higher risk and require more thought and information gathering by consumers due to their significance.

Deeper Processing

A method of learning or memorization that involves meaningful analysis of information, leading to stronger recall.

Cognitive

Relates to the processes of the mind involved in learning, thinking, reasoning, and understanding.