Multiple Choice
Suppose a country has a consumption tax that is similar to a state sales tax.If its government eliminates the consumption tax and replaces it with an income tax that includes an income tax on interest from savings,what happens?
A) There is no change in the interest rate or saving.
B) The interest rate decreases and saving increases.
C) The interest rate increases and saving decreases.
D) None of the above is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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