Which of the following would likely increase private saving?
A)both expansion of means testing and a consumption tax
B)expansion of means testing,but not a consumption tax
C)a consumption tax,but not expansion of means testing
D)neither expansion of means testing nor a consumption tax

Question

Quizplus · Accepted Answer

A consumption tax can incentivize individuals to save more by making consumption relatively more expensive. Expansion of means testing, however, may discourage saving as individuals who save more may no longer be eligible for certain government benefits. Therefore, a consumption tax only is the most likely option to increase private saving.

Which of the Following Would Likely Increase Private Saving