The effects of tax incentive programs such as RRSP and TFSA accounts suggest that these government programs designed to increase saving lead to
A) a decrease in the private capital stock.
B) decreased labour productivity.
C) an increase in the standard of living.
D) an increase in the real interest rate.

Question

Quizplus · Accepted Answer

Tax incentive programs such as RRSP and TFSA accounts encourage individuals to save more money, which can then be used for investment in the economy. This can lead to an increase in the private capital stock, which can ultimately lead to higher labour productivity and a higher standard of living. Additionally, an increase in private savings can also lead to lower interest rates, making it easier for businesses and individuals to access credit and invest in the economy. Therefore, the correct answer is C, an increase in the standard of living.

The Effects of Tax Incentive Programs Such as RRSP and TFSA