The effects of tax incentive programs such as RRSP and TFSA accounts suggest that these government programs designed to increase saving lead to ________ in the private capital stock.
A) virtually no change
B) a slight decrease
C) a slight increase
D) a significant increase

Question

Quizplus · Accepted Answer

Tax incentive programs like RRSP and TFSA accounts provide advantages to individuals who save for their retirement. These programs increase the overall savings in the economy, which leads to a boost in the private capital stock. It encourages individuals to contribute a significant proportion of their income towards their retirement accounts, which can then be utilized by businesses for investment and growth purposes. Hence, the tax incentive programs lead to a significant increase in the private capital stock.

The Effects of Tax Incentive Programs Such as RRSP and TFSA