Suppose a Country Has a Consumption Tax That Is Similar

question 79

Multiple Choice

Suppose a country has a consumption tax that is similar to a state sales tax.If its government were to eliminate the consumption tax and replace it with an income tax that includes an income tax on interest from savings,what would happen?

• A)There would be no change in the interest rate or saving.
• B)The interest rate would decrease and saving would increase.
• C)The interest rate would increase and saving would decrease.
• D)None of the above is correct.

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Definitions:

Bursitis

Inflammation of a bursa, typically one in the knee, elbow, or shoulder, that results in pain, swelling, and restricted movement.

Kyphosis

A spinal condition characterized by an excessive outward curvature of the spine, causing hunching of the back.

Phosphorus

A highly reactive, nonmetallic element essential to living organisms, involved in numerous cellular processes, including energy transfer and bone mineralization.

Phos

Short for phosphorus, a chemical element with the symbol P, essential for life and often found in the body's energy processing and bone structure.