Which of the Following Policy Changes Would Lead to a Decrease

question 17

Multiple Choice

Which of the following policy changes would lead to a decrease in the real interest rate and an increase in investment and saving?

• A)a larger investment tax credit
• B)an expansion of eligibility for Individual Retirement Accounts
• C)an increase in income-tax rates,with no change in the government budget deficit or surplus
• D)an increase in government purchases,with no change in taxes

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Definitions:

Poverty Income Threshold

The Poverty Income Threshold is the minimum level of income deemed necessary to achieve an adequate standard of living, used to identify those living in poverty.

Inflation

A general rise in the price level.

Public Assistance

Government programs designed to provide financial aid to individuals and families in need, including healthcare, food assistance, and housing subsidies.

Economic Conditions

The state of an economy at a given time, including factors like unemployment rates, inflation rates, and GDP growth.