Opponents of tax reforms intended to raise saving argue that such reforms
a. favor those with high income, and that saving may not rise because of the substitution effect.
b. favor those with high income, and that saving may not rise because of the income effect.
c. favor those with low income, and that saving may not rise because of the substitution effect.
d. favor those with low income, and that saving may not rise because of the income effect.
b
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The idea of comparative advantage is related to
A) the idea of opportunity cost. B) the idea of absolute advantage. C) using the worker with the most diverse sets of skills. D) engineering efficiency.
A consumer becomes loyal to a product when:
a. the good is available at a very low price. b. the product is as good as its substitutes. c. the product comes with a gift occasionally. d. he/she has had a positive experience with that good. e. discounts are offered periodically.
One explanation for the status quo bias is an aversion to loss
a. True b. False Indicate whether the statement is true or false
In 2010, the co-chairmen of President Obama's deficit reduction commission proposed curtailing or eliminating many tax deductions such as the one for mortgage interest. Economists who favor the proposal argue that it would (i) correct a misallocation of resources because too much of the economy's capital stock is tied up in residential housing and too little is invested in corporate capital. (ii)
cut both spending and taxes. (iii) encourage private philanthropy. a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii)