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. 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? Savings decrease, and investment decreases. Savings increase, and investment increases. Savings increase, and investment decreases. Savings decrease, and investment increases.


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.


Related Questions

Posted in Business

Samantha has a loan with an interest rate of 6.67 percent now, but the rate could increase 2 percent next year. What lending term best describes this loan? 1)finance charges 2)fixed rate loan 3)APR 3)variable rate loan

Answer: 3 Variable Rate Loan.

The variable rate loan best describes the loan agreement because the rate can vary and become a different percent over the course of the loan agreement. When you agree to loan terms with variable interest rates it is important to remember when they will change and check the interest rate amounts at any given time over the course of the loan, sometimes the loan terms jump drastically if not paid by the initial given rate.

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Suppose that Eric, an economist from a business school in Georgia, and Ginny, an economist from a public television program, are arguing over saving incentives. The following dialogue shows an excerpt from their debate: Ginny: I think it’s safe to say that, in general, the savings rate of households in today’s economy is much lower than it really needs to be to sustain the improvement of living standards. Eric: I think a switch from the income tax to a consumption tax would bring growth in living standards. Ginny: You really think households would change their saving behavior enough in response to this to make a difference? Because I don’t. The disagreement between these economists is most likely due to _____ . A. Difference in values B. Difference in scientific judgements C. Difference in perception versus reality Despite their differences, with which proposition are two economists chosen at random most likely to agree? A. Employers should not be restricted from outsourcing work to foreign nations. B. Central banks should focus more on maintaining low unemployment than on maintaining low inflation. C. Business managers can raise profit more easily by reducing costs than by raising revenue.

Correct option: Difference in scientific judgements

Both Eric and Ginny are from different backgrounds are working at the different levels of economic understanding. They have different skills sets, values and thought process for the same economic problem. Therefore, there is a difference in scientific judgement.

Correct Option A: Employers should not be restricted from outsourcing work to foreign nations.

The fundamental of economics suggest to make the best use of available resources. It suggests that if the cheap and qualified laborers are available abroad, no economy should hesitate in hiring them. It improves the profitability of the companies and make the product and services cheaper for everyone.


Posted in Business

Voluntary exchanges happen when both parties expect to _____. gain lose barter

I think the correct answer from the choices listed above is the third option. Voluntary exchanges happen when both parties expect to barter. It would be that both gain something from it so an exchange happens. Hope this answers the question.

Posted in Business

Assume the market for spiral bound notebooks is in equilibrium. All students in public schools need notebooks of some type when they attend classes. For each of the following, explain the possible effects on demand and/or supply and equilibrium price and quantity of spiral bound notebooks using a correctly labeled supply and demand graph with equilibrium price and quantity labeled. Under your hand-drawn graph, list the determinant of supply and/or demand that causes each shift as well as the change in price and quantity. a) The price of natural gas, a resource used by manufacturers throughout the United States, doubles. b) The government provides a subsidy for notebook manufacturers. c) Your income increases and spiral bound notebooks are an inferior good.

 a) If energy prices go up, manufacturing costs go up, which ultimately increases the price of the notebook. This will also most likely lead to a decrease in quantity, as the manufacturing cost per unit is higher. This is a supply determinant. 

b) In theory, the subsidy reduces the cost per unit to the manufacturer, which increases supply and often reduces price, again being a supply-side determinant. In reality, it creates an incentive for notebook manufacturers to keep doing what they are doing, disincentivizing cost-saving developments and alternatives. Why innovate when you can get free government cheese? 
Anyway, supply determinant. 

c) The price of an inferior good increasing tends to push some demand for superior goods, especially when the income to cost of good ratio remains the same for the inferior good but gets better for the superior one. Demand determinant. 

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Which of the following is not an example of how media coverage of the Space Race affected the economy? The media only covered positive elements of the Space Race and never mentioned any setbacks. Space memorabilia were made and sold to the public to celebrate successful launches. Astronauts became public heroes and helped sell the image of the space program. The race to beat the Soviet Union to the Moon supported the growth of NASA and its facilities.

Correct option: The media only covered positive elements of the Space Race and never mentioned any setbacks.

The above given option does not talk about any aspect of media coverage of the space race and its effects on the economy. Covering only positive aspect without explaining its economic implications does not have any positive or negative effect on any economic activity, externalities or economic well being of any country. On the other hand, option B , C and D talks about economic implications.


Posted in Business

A token economy incorporates _____ to modify behaviors by reinforcing desired behaviors with tokens that can be exchanged for various treats.

A token economy incorporates operant conditioning procedures to modify behaviors by reinforcing desired behaviors with tokens that can be exchanged for various treats.

Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.

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How many government agencies does the United Kingdom have to oversee the financial industry?

The United Kingdom has one primary agency to oversee the finances of the country. This agency is called HM Treasury. HM Treasury has several departments which help coordinate the finances of the country. Some of the departments within the HM Treasury are in charge of welfare, taxes, and business developments. I hope my answers has come to your help.

Posted in Business

If the Federal Reserve sells $50,000 in Treasury bonds to a bank at 6% interest, what is the immediate effect on the money supply

APEX verified answer <3

Answer- it is decreased by $50,000

i really hope this helps just got the right answer on apex quiz 1.2.3 <3 <3

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Standards of performance, or "performance goals" are used to? A. Communicate nonverbally B. Determine a worker's attitude C. Measure effectiveness but not efficiency D. Measure Productivity

I think the correct answer from the choices listed above is option D. Standards of performance, or "performance goals" are used to measure an employee's performance against established standards. This process assesses employee job traits and/or behaviors.

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Which of the following is a tax incentive? A.a tax on imported goods B.a set amount that you subtract from your gross income for yourself and any dependents C.taking tax payments out of an employee’s pay before he or she receives it D.the use of taxation to encourage or discourage certain behaviors

The answer is "D.the use of taxation to encourage or discourage certain behaviors".


A tax incentive is an administration measure that is proposed to urge people and organizations to burn through cash or to set aside extra cash by decreasing the measure of assessment that they need to pay.  

Tax incentive are methods for lessening charges for organizations and people in return for explicit alluring activities or ventures on their parts. Their motivation is to empower those organizations and people to take part in conduct that is socially dependable or potentially benefits the network.

Posted in Business

Which type of promotion do many people considered more credible because it is less biasedpublicitypublic relationspress releaseadvertising

I think the correct answer from the choices listed above is the third option. The type of promotion many people considered more credible because it is less biased is a press release. A press release is said to be unbiased and should contain all information from all angles or side of a situation. Hope this helps.

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What is a person’s taxable income? A. all personal exemptions and deductions B. gross income after subtracting exemptions and deductions C. the gross income received from salaries, wages, tips, and commissions D. all income withheld by an employer and sent to the federal government

I'ts not the C, gross income received from salaries, wages, tips, and commissions. I just chose that on my quiz and got it wrong. I did a little more research after that and now I believe it is

B, gross income after subtracting exemptions and deductions.

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Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, would you have more than $102, exactly $102 or less than $102? More than $102 Less than $102 Exactly $102

Hey there! Hello!

For this problem, take the interest equation into account: I = Prt. I is the interest, P is the principal amount that will be invested, r is the rate of interest per year (expressed in decimal form, where 90% is 0.9, for example), and t is the amount of time. Let's solve the amount of money gained from interest after one year:

I = Prt
I=100*0.02*1
I=2

That means 2 dollars are earned after one year. If $102 is the total after one year, and interest is earned yearly, it surely can't be $102 at the end of five years. So, let's solve for five years this time:

I = Prt
I=100*0.02*5
I=10

So, at the end of five years, $110 will be earned. This is more than $102 dollars, meaning that your first answer choice is the correct one. 

Hope this helped you out! Feel free to ask me any additional questions you may have. :-)

Posted in Business

Total quality management theorizes that if workers are more responsible, they will ______. a. Increase overall quality b. Reduce overall quality c. Have no effect on overall quality d. None of the above

Total quality management (TQM) theorizes that if workers are more responsible, they will increases overall quality. Correct answer:A

TQM is a management approach towards improving the quality of an organization's outputs, including goods and services, through continual improvement of internal practices and leading to long–term success through customer satisfaction.

Posted in Business

Apples are part of which factor of production?

Apples are part of which factor of production?(Land)

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You live on a large volcanic island not far from an active volcano. Besides damage from lava, what other hazards might affect your town and its people?

Besides damage from lava, there are many other hazards that may affect your town and its people. The air may be low quality when the volanco is rupturing from the smoke and ash. When this moves in to town it we pollute the crops which has an effect on the farmers and those who will buy the crops for food. Not only can it hurt crops, but livestock is also hurt if they breath in too much smoke and end up dying. Food can become scarce if crops and animals are not surviving the active volcano.

Posted in Business

Money market accounts Single stocks Bonds Mutual funds Fixed annuities Real estate For this assignment: Put the investments in order by least risk to greatest risk. You can list by letter only (for example: a, b, c, d, e, f). On a second line, order the investments by least return to greatest return. Again, you can list by letter only.

Investments in order by least risk to greatert risk.

1) Money market accounts
2) bonds
3) fixed annuities
4) mutual funds
5) real estate
6) single stocks

Money market - low risk, low return
Single stocks - high risk, 
Bonds - low risk, low return
Mutual funds - medium risk
Fixed annuities - high risk
Real estate - high risk

Usually low risk investments give out low but constant returns and high risk investments give out high returns. 

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