Suppose that the government introduces a tax on interest earnings (savings).  That is, lenders receive an interest rate of (1-x)*r on the savings, where x is the tax rate. If the tax rate decreases

Normale Antwort Multiple Choice

• The budget constraint of the lender becomes flatter

  The budget constraint of the lender becomes flatter

  The budget constraint of the lender becomes flatter
• The budget constraint of the borrower becomes flatter

  The budget constraint of the borrower becomes flatter

  The budget constraint of the borrower becomes flatter
• The budget constraint of the lender becomes steeper

  The budget constraint of the lender becomes steeper

  The budget constraint of the lender becomes steeper
• The budget constraint of the borrower becomes steeper

  The budget constraint of the borrower becomes steeper

  The budget constraint of the borrower becomes steeper

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