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Question 2 1 pts A tax on interest income: causes the gross interest rate paid by investors to exceed the net interest rate received by savers. O will always reduce saving. will always increase saving. is equivalent to a lump-sum tax Question 3 1 pts A tax on interest income does not prevent credit market from efficiently allocating resources. True False Question 4 1 pts Currently, the tax treatment of capital gains in the United States is such that: all capital gains are taxed. all realized capital gains are taxed most realized capital gains are taxed. only capital gains adjusted for inflation are taxed.

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Answer #1

Question 3: Tax on interest income doesn't prevent credit market fro efficiently allocating resources.

True

Explanation:

Taxation always help in allocating resources efficiently in the country.

Question 4: Currently, tax treatment of capital gains in the United States is such that:

All realized capital gains are taxed.

Explanation:

In United States, all realized capital gains are taxed from the cost basis.

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