Which of the following statements is not correct?
a. Reducing taxes on interest income might encourage people to save more.
b. Reducing taxes on interest income might reduce saving.
c. A price increase will create income and substitution effects that will both always work to reduce consumption of the good.
d. Utility is maximized when the marginal rate of substitution between any two goods equals the relative prices of the two goods.
c
Economics
You might also like to view...
How can governments intervene in trade?
A) by not buying products from competing countries B) by helping reduce economic uncertainty C) by producing cheaper products D) all of the above
Economics
If the MPS is 0.1 and the income tax rate is 0.33 the marginal leakage rate for a closed economy is
A) 0.033. B) 0.23. C) 0.43. D) 0.397.
Economics