If a Reduction in Taxes on Savings Reduced the Amount

question 36

Multiple Choice

If a reduction in taxes on savings reduced the amount of private 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:

Plausible Excuses

Reasonable justifications offered to explain behavior or actions that may not initially be obvious.

Internalized Conscience

The part of an individual's psyche that is made up of internalized moral standards, guiding right and wrong conduct.

Socially Responsive

Characteristics of an individual or entity that demonstrates awareness, sensitivity, and adaptability to social contexts and needs.

Observational Learning

Gaining understanding and abilities through the observation and emulation of other individuals.