Which of the Following Statements Is False

question 129

Multiple Choice

Which of the following statements is false?

• 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.

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Definitions:

Investment

The process of distributing funds or resources with the aim of achieving income or financial gain.

Corporate Profits Tax

A tax imposed on the income or profit of corporations, calculated as a percentage of their earned income.

Investment

The distribution of funds or other resources with the aim of achieving income or profit at a later date.

Business Firms

Organizations involved in the trade of goods, services, or both to consumers, operating in an attempt to profit.