In December 2024
Answer to Question #297159 in Macroeconomics for Pedro
What are the the effects of an expected future increase in taxes on the current national savings, investment, and the interest rate? Using the saving - investment diagram (graph) to analyze.
When the taxes are expected to rise in the future, people will tend to spend more in the moment. This is because the people e will be spending to buy products and keep stock for the future use. Therefore people will invest more in the moment, save less and the interest rate will increase as the demand for money increases.
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