If a Reduction in Taxes on Savings Reduced the Amount

question 61

Multiple Choice

If a reduction in taxes on savings reduced the amount of saving,then the

• A) income effect equaled the substitution effect.
• B) income effect outweighed the substitution effect.
• C) the substitution effect outweighed the income effect.
• D) None of the above.

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Definitions:

Day-To-Day Basis

Refers to the routine or daily activities and tasks that are performed regularly.

Cost Ratio Formula

A mathematical formula used to determine the costs associated with producing goods or services in relation to the revenue they generate.

Total Expenses

The sum of all expenditures incurred by an individual or organization, including operational, capital, and other miscellaneous costs.

Petty Cash

A small amount of cash kept on hand for minor, immediate expenses.