Accordingtothetextbook,whichofthefollowingstatementsis(are)correct?(x) An advantage of a consumption tax over the present income tax system is that a consumption taxdiscourages consumption and encourages saving.(y) If interest income from savings is taxed, a disincentive to save is created and less saving occurs.(z) An advantage of a consumption tax over the present tax system is that a consumption tax places more ofthe tax burden on the wealthy.(x), (y) and (z)(x) and (y) only(x) and (z) only(y) and (z) only(x) only

A consumption tax is a taxing system in which people are charged on how much people consume rather…

Answered: Accordingtothetextbook,whichofthefollow…

Principles of Macroeconomics (MindTap Course List)

7th Edition

ISBN:9781285165912

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Savings,Investment And The Financial System

Section: Chapter Questions

Problem 2QCMC

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Accordingtothetextbook,whichofthefollowingstatementsis(are)correct?
1. (x) An advantage of a consumption tax over the present income tax system is that a consumption tax
  
  discourages consumption and encourages saving.
2. (y) If interest income from savings is taxed, a disincentive to save is created and less saving occurs.
3. (z) An advantage of a consumption tax over the present tax system is that a consumption tax places more of
  
  the tax burden on the wealthy.
1. (x), (y) and (z)
2. (x) and (y) only
3. (x) and (z) only
4. (y) and (z) only
5. (x) only

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