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

question 87

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:

Aldehydes

Organic compounds containing a carbonyl group bonded to at least one hydrogen atom, with the general formula R-CHO.

Ketones

Organic compounds characterized by a carbonyl group (C=O) bonded to two carbon atoms, important in many biological and industrial processes.

Acid Chlorides

Organic compounds derived from acids by substituting a hydroxyl group with a chlorine atom, known for their reactivity.

1710 cm^-1

This number typically represents the absorption peak in infrared spectroscopy corresponding to the stretching vibration of a carbonyl (C=O) group in a compound.