Question

Higher levels of savings and investment lead to greater rates of economic growth. All of these government measures result in higher savings and investment EXCEPT:

	subsidizing contributions made to pension funds.
	focusing taxation more on consumption.
	placing high regulations on business activities.
	using tax credits to offset tax liabilities.

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Answer 1

Placing high regulations on business activities.

( It helps consumers more than savers. When consumption Increases savings will fall. People won't be interested in investing due to excessive regulations. and the complex procedure involved in it. Therefore, placing high regulations on the business activities reduces the incentive to save and invest.

* Subsidizing contribution Increases the income available to pensioners.Higher the income, higher the savings.

* When taxes are imposed on consumption, consumption becomes more expensive.Aa a result, consumption will fall and savings will Increase.,

*Tax credits will attract more savings and investment.)