If a Reduction in Taxes on Savings Reduced the Amount

question 36

Multiple Choice

If a reduction in taxes on savings reduced the amount of private saving,then the

• A)income effect equaled the substitution effect.
• B)income effect outweighed the substitution effect.
• C)the substitution effect outweighed the income effect.
• D)None of the above.

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Definitions:

Interval Estimate

An assortment of values, from sample statistics, which is envisioned to contain the value of a mysterious population parameter.

Population Mean

The average value of all elements in a complete set of a population.

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population dataset.

Confidence Interval

A range of values, derived from sample data, that is likely to contain the value of an unknown population parameter with a certain level of confidence.