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:

Carboxylic Acid Derivative

Compounds obtained by substituting the hydroxyl group in carboxylic acids with other functional groups like halides, amides, or esters.

β-Hydroxybutyronitrile

An organic compound featuring a hydroxyl group (–OH) and a nitrile group (–CN) on a four-carbon chain, positioned beta (β) to each other.

Boiling Point

The temperature at which the vapor pressure of a liquid equals the external pressure surrounding the liquid, causing it to turn into vapor.

Acetic Acid

A weak organic acid with the formula CH3COOH, known for being the main component of vinegar.