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.
b
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Cost-push inflation is caused by a leftward shift of the aggregate demand curve
a. True b. False Indicate whether the statement is true or false
Opponents of the minimum wage point out that the minimum wage
a. encourages teenagers to drop out of school. b. prevents some workers from getting needed on-the-job training. c. contributes to the problem of unemployment. d. All of the above are correct.
Supporters of raising the minimum wage argue that minimum-wage laws are
a. a tax-free way to help the working poor. Businesses bear the burden of paying higher wages, not the government. b. better than the Earned Income Tax Credit (EITC) in targeting the working poor. The EITC may benefit teenagers from middle-class families who work summer jobs at the minimum wage. c. better than in-kind transfers such as food stamps in providing food rather than unhealthy items such as drugs or alcohol. d. a way to increase employment of those likely to earn the minimum wage.
Present value is:
A. how much a certain amount of money that will be obtained in the future is worth today. B. how much a certain amount of money that you have in the present will be worth in the future. C. the process of accumulation of additional interest paid on interest that has already been earned. D. how much a certain amount of money needs to be discounted to be meaningful.