Which of the Following Two Effects of a Decrease in the Tax

question 17

Multiple Choice

Which of the following two effects of a decrease in the tax rate on saving would raise savings?

• A)the income effect and the substitution effect
• B)the income effect but not the substitution effect
• C)the substitution effect but not the income effect
• D)neither the substitution effect nor the income effect

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Definitions:

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Genome-wide Association Studies

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The field of biology that studies the structure and function of genes at a molecular level.

Sociometer Theory

A psychological theory suggesting that self-esteem is an internal gauge of the degree to which one is included or valued in social contexts.