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.

Grasp the concept of slope in graphical analysis and its implication on economic variables.

Recognize the distinction between positive and normative economics.

Identify the characteristics and implications of economic growth.

Understand the common fallacies in economic reasoning.

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