page6 - c an income effect that discourages saving and a...

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35. IRA, 401(k), 403(b), and Keogh plans a. impose added taxes on those who save. b. place no limits on the amount people can deposit into these programs. c. impose penalties for withdrawals except under certain circumstances. d. None of the above are correct. 36. Which of the following is not an argument by those who oppose tax-law changes to encourage saving? a. Saving is not an important determinant of a nation's ability to produce output. b. Saving is not very responsive to changes in the tax rate. c. Reducing the budget deficit instead of changing the tax laws could raise saving. d. Changes in the tax laws to induce savings would distribute the tax burden less fairly. 37. A higher rate of return to saving has a. income and substitution effects that both decrease saving. b. income and substitution effects that both increase saving.
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Unformatted text preview: c. an income effect that discourages saving and a substitution effect that encourages saving. d. an income effect that encourages saving and a substitution effect that discourages saving. 38. A reduction in the tax rate on income from saving would a. most directly benefit the poor in the short run. b. increase real wages over time. c. decrease the capital stock over time. d. decrease productivity over time. 39. The five debates over macroeconomic policy exist mostly because a. economists disagree over basic issues such as the importance of saving for economic growth. b. there are tradeoffs and people disagree about the best way to deal with them. c. politicians offer misleading information. d. people fail to clearly see the benefits or the costs of most changes....
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