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Author Question: Explain how a consumption tax could lead to a decrease in real interest ... (Read 7 times)

DyllonKazuo

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on: Jun 30, 2018
Explain how a consumption tax could lead to a decrease in real interest rates.

Question 2

Assume that the supply curve for tomatoes is upward sloping. If the price per pound increases from 0.99 to 1.89, a greater quantity of tomatoes will be supplied to the market.
 a. True
  b. False
  Indicate whether the statement is true or false


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meryzewe

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A tax on consumption would discourage individuals from making purchases. As a result, these individuals would be saving more. That would lead to an increase in the supply of loanable funds which would lead to a decrease in real interest rates.

Answer to Question 2

True


DyllonKazuo

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

jamesnevil303

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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