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Author Question: How does double taxation affect consumption, saving and economic growth? What will be an ideal ... (Read 119 times)

Awilson837

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on: Jun 29, 2018
How does double taxation affect consumption, saving and economic growth?
 
  What will be an ideal response?

Question 2

Refer to Figure 2-8. If Vidalia chooses to produce 60 dozen orchids, how many roses can it produce to maximize production?
 
  A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses


jaygar71

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Reply #1 on: Jun 29, 2018
Answer to Question 1

By double taxing saving, an income tax distorts the choice between consumption and saving which is really the choice between present consumption and future consumption. Double taxation also tends to reduce the saving rate and the rate of investment  and ultimately the rate of economic growth.

Answer to Question 2

B


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