When tax code changes increase saving incentives, the interest rate will _____ and investment will _____
Fill in the blank(s) with correct word
fall, increase
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The difference between price elasticity of demand and income elasticity of demand is that
A) income elasticity of demand examines how an individual's income changes when prices change and the price elasticity of demand examines how quantity demand changes when price changes. B) income elasticity refers to the movement along the demand curve while price elasticity refers to a horizontal shift of the demand curve. C) income elasticity measures the responsiveness of income to changes in supply while price elasticity of demand measures the responsiveness of demand to a change in price. D) income elasticity refers to a horizontal shift of the demand curve while price elasticity of demand refers to a movement along the demand curve.
Other things the same, during recessions taxes tend to
a. rise. The rise in taxes stimulates aggregate demand. b. rise. The rise in taxes contracts aggregate demand. c. fall. The fall in taxes stimulates aggregate demand. d. fall. The fall in taxes contracts aggregate demand.