An increase in the tax rate on interest income
a. raises the amount earned on savings. Saving will rise if the income effect of the increase in the tax rate is larger than the substitution effect.
b. raises the amount earned on savings. Saving will rise if the income effect of the increase in the tax rate is smaller than the substitution effect.
c. reduces the amount earned on savings. Saving will fall if the income effect of the increase in the tax rate is larger than the substitution effect.
d. reduces the amount earned on savings. Saving will fall if the income effect of the increase in the tax rate is smaller than the substitution effect.
d
You might also like to view...
The gap between the current unemployment rate and the natural rate of unemployment is called:
A) frictional unemployment B) structural unemployment C) cyclical unemployment D) full employment
Which of the following causes the production possibilities curve to shift to the right?
a. d and e. b. c and e. c. A war. d. The development of a new technology that improves productivity. e. The discovery of oil reserves.
The difference between a change in quantity supplied and a change in supply is that a change in:
a. quantity supplied is caused by a change in a good's own, current price, while a change in supply is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. b. supply is caused by a change in a good's own, current price, while a change in the quantity supplied is caused by a change in some other variable, such as input prices, prices of related goods, expectations, or taxes. c. quantity supplied is a change in the amount people want to sell, while a change in supply is a change in the amount they actually sell. d. supply and a change in the quantity supplied are the same thing.
In Econland, 500,000 of the 2 million people in the country are employed. Average labor productivity in Econland is $15,000 per worker. Real GDP per person in Econland totals:
A. $11,250. B. $3,750. C. $1,250. D. $60,000.