Suppose tax laws were reformed to encourage saving by increasing the rate of return on savings. Which of the following would be true?
a. Both the income effect and the substitution effect would tend to increase the amount of money a household saved.
b. The income effect would tend to increase household savings while the substitution effect would tend to decrease household savings.
c. The income effect would tend to decrease household savings while the substitution effect would tend to increase household savings.
d. Both the income effect and the substitution effect would tend to decrease the amount of money a household saved.
c
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Investment banks purchase new security issues in the hope of making a profit. This is the act of
A) reinsuring. B) factoring. C) syndicating. D) underwriting.
Describe the major costs of inflation, being sure to distinguish between anticipated and unanticipated inflation
What will be an ideal response?