Question

To help increase investment spending, the government can: lower taxes on investment spending while raising taxes on savings so that total tax revenue remains constant. lower taxes on consumption so that disposable income rises. lower taxes on the returns from savings so that total savings increase and the interest rate falls. raise taxes on the returns from bonds while lowering taxes on stock dividends.

Answer 1

Lower taxes on the returns from savings so that total savings increas and the interest rate falls.

Answer 2

The correct answer is letter "C": lower taxes on the returns from savings so that total savings increase and the interest rate falls.

Step-by-step explanation:

A government can take several actions in an attempt to boost private investment in the economy. Reducing taxes from returns on savings is one of those measures. The lower the taxes paid on savings, the more money individuals and companies will have available. Thus, small businesses can start their operations or large existing entities can increase their networks.