Suppose Tastes for Consumption Now and Consumption in the Future

question 2

True/False

Suppose tastes for consumption now and consumption in the future have constant elasticity of substitution.It may then be the case that a tax on interest income is efficient even if savings fall in response to the tax.

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Definitions:

Diagnosis

The process of identifying the nature of an illness or other problem by examination of the symptoms.

Venn Diagrams

Graphical representations using circles to show the relationships and differences between various sets.

Intersection

The point or set of points where two or more geometric figures meet or cross.

Events

In probability, events are outcomes or occurrences that can be identified in a probabilistic experiment, and to which probabilities can be assigned.