A Decrease in the Tax Rate Is More Likely to Increase

question 174

Multiple Choice

A decrease in the tax rate is more likely to increase national saving if

• A) the income effect of a change in the interest rate is small and an increase in private saving tends to have a small impact on the capital stock.
• B) the income effect of a change in the interest rate is small and an increase in private saving tends to have a large impact on the capital stock.
• C) the income effect of a change in the interest rate is large and an increase in private saving tends to have a small impact on the capital stock.
• D) the income effect of a change in the interest rate is large and an increase in private saving tends to have a large impact on the capital stock.

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Definitions:

Limit Responsibility

The act of defining or restricting the amount of duty and accountability assigned to a person or organization.

Apologize

To express regret for an offense or fault.

Delivering Bad News

The process of conveying unfavorable or disappointing information to individuals in a sensitive and thoughtful manner.

Recommendation

An advice or suggestion given by someone with knowledge or expertise on a certain matter.