Suppose that the government changes the tax code to allow additional amounts of money to be placed in 401k retirement accounts, increasing the extent to which people can delay their tax obligation (effectively, this is a tax cut on retirement savings). Show the effect by shifting the appropriate curve in the market for savings.
According to this model, what is the result?

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30-11-2022
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Suppose that the government changes the tax code to allow additional amounts of money to be placed in 401k retirement accounts, increasing the extent to which people can delay their tax obligation (effectively, this is a tax cut on retirement savings). Show the effect by shifting the appropriate curve in the market for savings.
According to this model, what is the result?

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The supply curve will be shifted to the right in this situation where the government changes the tax code to allow additional amounts.

Private investment would rise as borrowing costs dropped. Right-shift the supply curve. Demand curves remain stationary.

The supply curve illustrates the relationship between the price of an item or service and the volume delivered over a specific time period. In a typical scenario, the amount supplied will be shown on the horizontal axis and the price will be shown on the left vertical axis.

The law of supply is expressed by the supply curve, which rises from left to right: The amount supplied rises as a certain commodity's price rises (all else being equal).

Hence, the supply curve will shift to the right.

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