Supply-Side Economists Argue That Taxing of Nominal Gains and Interest

Multiple Choice

Supply-side economists argue that taxing of nominal gains and interest earnings during inflationary periods

A) results in an increased effective tax rate on real returns but will not retard saving.
B) will retard saving but will not increase the effective tax rate on real returns.
C) will increase the effective tax rate on real returns and will retard saving.
D) None of the above