From the options given below, identify which policy would be suitable to encourage and stimulate savings? (Multiple options may be correct)Increasing interest ratesOffer tax-exempt saving options Decreasing interest rates Increase tax rates
Question
From the options given below, identify which policy would be suitable to encourage and stimulate savings? (Multiple options may be correct)Increasing interest ratesOffer tax-exempt saving options Decreasing interest rates Increase tax rates
Solution
The policies that would be suitable to encourage and stimulate savings are:
-
Increasing interest rates: Higher interest rates mean that savers will get a higher return on their savings, which can encourage more people to save.
-
Offer tax-exempt saving options: If the money saved is not subject to tax, people will have more of an incentive to save as they will get to keep a larger portion of their savings.
Decreasing interest rates and increasing tax rates would not encourage savings. Lower interest rates mean savers get less return on their savings, and higher taxes mean people have less disposable income to save.
Similar Questions
Single choice1)Lowering interest rates or reducing personal income taxes is an example of:Neutral policyRestrictive policyStimulative policy
Multiple Choice QuestionWhich policy affects interest rates charged on loans and paid on savings?Multiple choice question.Fiscal policyMonetary policyForeign policyAutonomous policy
The benefit of saving is the:Group of answer choicesreal interest ratenominal interest rateinflation ratesaving rate
Select all that applyWhich of the following tools of fiscal policy are used to positively stimulate an economy?Multiple select question.Tax reductionsIncreased government spendingTax increasesDecreased government spending
Multiple Choice QuestionAnything that increases the rate of return on potential investments will increase the demand for which of the following?Multiple choice question.Government bondsLoanable fundsEconomic rentsHousehold spending
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.