A shift away from taxing asset income towards taxing consumption would lead to:
a) A larger demand for loanable funds, a higher interest rate, and slower economic growth,
B) A larger supply of loanable funds, a lower interest rate, and faster economic growth,
c) A larger government budget deficit and slower economic growth,
d) A smaller supply of loanable funds, a higher interest rate, and faster economic growth,
e) A larger supply of loanable funds, a lower interest rate, and slower economic growth

Answers

Answer 1

A shift away from taxing asset income towards taxing consumption would lead to B) a larger supply of loanable funds, a lower interest rate, and faster economic growth.

The shift away from taxing asset income and towards taxing consumption is a concept that refers to a tax reform strategy that is usually focused on improving the overall structure of a tax system. The aim of this reform is to make the tax system more equitable, fair, and efficient in the long run. A tax on asset income could lead to a higher interest rate, which can reduce demand for loanable funds, and result in slower economic growth, while a tax on consumption would encourage people to spend their money, leading to faster economic growth.

As a result, a shift away from taxing asset income towards taxing consumption would lead to a larger supply of loanable funds, a lower interest rate, and faster economic growth. The supply of loanable funds would increase because consumers would be encouraged to save and invest money, whereas the interest rate would decrease because the demand for loans would decrease. This would lead to faster economic growth as businesses would have access to more funds at a lower interest rate, encouraging investment and economic expansion. Therefore, option B is correct.

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Related Questions

piaget would argue that as an adolescent, mildred is better able to understand calculus because she is in the sensorimotor stage.
a. true
b. false

Answers

The answer to this question is b. False. The statement "Piaget would argue that as an adolescent, Mildred is better able to understand calculus because she is in the sensorimotor stage" is false.

The sensorimotor stage is one of Piaget's developmental stages; however, it is not the stage of development where the adolescent mind is better at understanding calculus. Explanation: Piaget's developmental theory offers that there are four stages of cognitive growth: the sensorimotor stage (birth to age 2), the preoperational stage (2 to 7 years), the concrete operational stage (7 to 12 years), and the formal operational stage (12+ years). The formal operational stage is the stage that applies to adolescence, according to Piaget. In this stage, individuals can reason in hypothetical circumstances and use abstract reasoning. Adolescents have the ability to think deductively, which means they can utilize general principles to predict specific results. They can comprehend mathematics and science ideas, including calculus, at a more sophisticated level than younger children. Thus, we can conclude that as an adolescent, Mildred is better able to understand calculus because she is in the formal operational stage.

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