2018, Question 2 · 5 points
Lower tax on interest earnings and saving
Say how a cut in the tax on interest income changes private saving, show the effect in loanable funds, and explain what the rate change does to aggregate demand now and to potential GDP later.
This exam had three free-response questions in a 60 minute section (a 10 minute reading period and 50 minutes of writing), worth 10, 5 and 5 points, with students told to spend about half the time on Question 1 and split the rest between Questions 2 and 3. The current exam has 3 free-response questions in 60 minutes. The skills these questions practice still count.
Lessons this question draws on
1 Read the question
The question is College Board's, from the 2018 exam. It starts on page 3 of the PDF. College Board no longer posts this exam, so it opens from the copy of College Board's PDF that the Internet Archive saved on November 12, 2025.
2 Write your answer
Answer each part the way you would on the exam, in full sentences, with your work shown. Your writing saves as you type.
3 Score it
Score your answer against College Board's scoring guidelines, one point at a time. Give yourself a point only when your answer says what the guideline asks for.
Scoring guidelines (PDF, page 4) What the exam readers saw (Chief Reader report)
Question, scoring guidelines and Chief Reader report: College Board, from the Internet Archive. The title, summary are ours.