Multiple Choice
In 1995, MP Bill Gatt proposed that the income tax be replaced with a consumption tax. If his program had been passed, how would the equilibrium interest rate and the quantity of loanable funds have been affected?
A) The equilibrium interest rate and quantity of loanable funds would be lower.
B) The equilibrium interest rate and quantity of loanable funds would be higher.
C) The equilibrium interest rate would be higher, and the equilibrium quantity of loanable funds would be lower.
D) The equilibrium interest rate would be lower, and the equilibrium quantity of loanable funds would be higher.
Correct Answer:
Verified
Correct Answer:
Verified
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