The most likely effect of an decrease in income tax rates would be a(n): increase in interest rates. decrease in the supply of l

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olga2289 [7]

3 years ago

13

The most likely effect of an decrease in income tax rates would be a(n): increase in interest rates. decrease in the supply of l

oanable funds. decrease in the savings rate. all of the above would occur none of the above would occur

Business

1 answer:

Shkiper50 [21] · Answer 1 · 2022-06-03T18:33:47+03:00

Answer: none of the above would occur

Explanation:

When there are lower tax rates, people will have more disposable income left aft paying taxes. It is from this disposable income that people are able to save so if it increases, they will be able to save more.

When they save more, supply of loanable funds will increase because loanable funds come from savings. Interest rates would therefore decrease because there are now more loanable funds.