Which of the Following Two Effects of a Decrease in the Tax

question 17

Multiple Choice

Which of the following two effects of a decrease in the tax rate on saving would raise savings?

• A)the income effect and the substitution effect
• B)the income effect but not the substitution effect
• C)the substitution effect but not the income effect
• D)neither the substitution effect nor the income effect

---

Definitions:

Content Theories

Theories in psychology that attempt to explain specific aspects of motivation, focusing on the specific factors that motivate individuals.

Procedure Theories

Frameworks or models that focus on the specific methods, steps, or processes involved in accomplishing tasks or achieving goals.

Procedural Justice

Procedural justice relates to the fairness and transparency of the processes used to make decisions or determine outcomes, affecting perceptions of fairness in organizational and legal contexts.

Fairly Allocated

Describes resources or opportunities that are distributed or assigned in a just, equitable, and impartial manner.