If the supply curve of savings is upward sloping, a comprehensive wealth tax will:
a. increase the market rate of interest.
b. reduce the market rate of interest.
c. have zero excess burden.
d. have no effect on investment
An upward sloping supply curve indicates that savings increases with interest rates. This is to be expected, because when the interest rate increases, the reward for saving increases. Therefore, saving and interest rates are generally positively related, ...
An upward sloping supply curve is clearly exemplified.