Given a Real Interest Rate,a Decrease in Taxes on Saving

question 2

Multiple Choice

Given a real interest rate,a decrease in taxes on saving ________ the after-tax real interest rate and ________ the incentive to save.

• A) increases; increases
• B) increases; reduces
• C) decreases; increases
• D) decreases; reduces

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Definitions:

Incidental Damages

Incidental damages refer to the costs incurred by one party due to another's breach of contract, including expenses directly resulting from the breach, such as costs to find a replacement.

Installment Contract

A contractual arrangement where payment is made in parts over a period of time until the full purchase price is paid.

CISG

Stands for the United Nations Convention on Contracts for the International Sale of Goods, which governs the sale of goods between businesses in different countries.

Avoidance

A legal principle or action taken to invalidate or cancel a contract, thereby relieving the parties of their obligations under that contract.