Which of the Following Statements Is Not Correct

question 376

Multiple Choice

Which of the following statements is not correct?

• A)Reducing taxes on interest income might encourage people to save more.
• B)Reducing taxes on interest income might reduce saving.
• C)A price increase will create income and substitution effects that will both always work to reduce consumption of the good.
• D)Utility is maximized when the marginal rate of substitution between any two goods equals the relative prices of the two goods.

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Definitions:

Inborn Perceptual Abilities

The natural or innate capabilities to perceive the environment through senses, present from birth.

Sucking

A natural reflex for babies, which involves drawing in anything within their grasp by creating a vacuum in their mouths.

Prenatal Stage

The stage of human development that occurs from conception until birth.

Zygote

The initial cell formed when a sperm cell fertilizes an egg cell, marking the beginning of human development.