the tax system of the c country encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings.Nevertheless,it is clear that c country's tax system does not consistently favor borrowing over saving ,for it is did, there would be no ------------tax relief in c for those portions of a taxpayer's income,if any, that are set aside to increase that taxpayer's total savings.