In a certain economy, people save some part of their income in the financial sector and use the remaining part for consumption. The government decides to increase the tax rates for everyone in that economy. What effect will the tax increase have on savings and investment in the economy?A.
Savings decrease, and investment decreases.
B.
Savings increase, and investment increases.
C.
Savings increase, and investment decreases.
D.
Savings decrease, and investment increases.

Answers

Answer 1

Answer:

Savings decrease, and investment decreases.

Explanation:

A government normally increases taxes to boost it's tax revenue but this also results in the decrease of savings and investments. Higher taxes leaves consumers with less disposable income which then discourages them from saving and investing.

Answer 2

Answer: The answer is A, because the government is increasing tax causing people in the economy to have less money to save and invest.

Related Questions

What is socio-political participation?
What are 3 ways a country benefits from immigration? (besides economy)
Satellite imagery would be most useful in what?
Which of the following statements best describes the use of the term “new world”? A. "New world" referred to the expanded understanding of the Earth's landmasses as a result of Magellan's expedition. B. "New world" is how Europeans of the fifteenth and sixteenth centuries referred to the continents of North and South America. C. "New world" is the term given to Spanish culture by the civilizations of North and South America. JUST ANSWER I DONT NEED DETAIL XD
What country started the slave trade with Africa

How is Ethiopia dealing with the water crisis?

Answers

The problem in Ethiopia's water is not only it's limited, but it's also contains some substances that is not really safe for drinking . in order to deal with it, Ethiopian ministry of health formed a sanitation division to sanitation major Ethiopian water supply and they also deliver some water to an Area that needed it the most

What is freedom of religion?

Answers

It means the personal freedom to follow whatever religion you choose, or
NO religion if that's your choice, in any way you want as long as you don't
bother other people, without any interference from laws or other people,
and without any penalty or discrimination no matter what your choice is.

That seems like such common sense that it's hard to understand that
in huge parts of the world, that's not the way it is at all.

Freedom of religion is being able to have a religion, and express it the way YOU want and no on can discriminate you from it.

Mark each statement that correctly identifies a current theory on why the Indus Valley civilization declined. A.
The surrounding land was severely deforested.

B.
Foreign conquerors forced the people to leave.

C.

Irrigation made the soil salty and unfit for farming.

D.
Disease reduced the population.

E.
Indus Valley populations migrated to Central Asia and Africa.

Answers

So the question is asking on which of the following choices are the reason why the Indus Valley civilization decline and base on my research, I would say that the answers would be A. The surrounding land was severely deforested , C. Irrigation made the soil salty and unfit for farming and D. Disease reduced the population. I hope this would help

Answer:

A. The surrounding land was severely deforested , C. Irrigation made the soil salty and unfit for farming and D. Disease reduced the population. i think this helps.

Explanation:

What is adolf hitler most famous for

Answers

His role in conducting a mass genocide, which killed 6 million Jewish people, including children.

Why was the construction of the Erie Canal such a great challenge?

Answers

The Erie Canal had no engineers working on it in many sections. The amateurs in charge of it could only survey with the compass, chain and level. Men would agree to be responsible for a section at a time. They would dig by hand and uses horses to haul the dirt away. There was a problem when they got to Lake Erie because the Hudson River was 600 feet below the Lake Erie. They had to dig through limestone and mountains to get to Lake Erie. They lost 1000 workers in one season due to malaria.

Philosophers are thinkers who ponder blank

Answers

philosophers are thinkers who ponder questions of life.

Other Questions

Which statement best describes a difference between authoritarian government and constitutional government?A) In an authoritarian government, the people grant government leaders their authority.B) In an authoritarian government, a written document removes all powers from the government.C) In a constitutional government, the powers of government are limited by a written document.D) In a constitutional government, leaders can enact whatever policies they choose, regardless of public opinion.

The first romans were what nationally

One animal dies in a desert area. With the help of scavengers and bacteria it decomposes completely in the hot sun. A second animal dies while drinking in a stream. The body is covered in sediment before it decomposes. Which is more likely to leave a fossil?

How do I get better grades