Business
Business, 13.02.2020 22:26, maevemboucher78

Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 20%. Now suppose there is a decrease in the tax rate on interest income, from 20% to 15%.

This change in the tax treatment of saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to .

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Scenario 1: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially...

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