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

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Definitions:

Effect Size

A quantitative measure of the magnitude of the experimental effect, indicating the strength of the relationship between the variables.

Cramér's V

A measure of association between two nominal variables, indicating the strength of their relationship.

Effect Size

A quantitative measure of the strength of a phenomenon or the magnitude of a difference in a statistical analysis.

Cramér's V

A measure of association between two nominal variables, giving a value between 0 and 1 to indicate the strength of association.