The income effect is thought to offset the substitution effect among very high wage earners

The issue of fairness in taxes is a very controversial one. Compare and contrast both the ability-to-pay principle with that of the benefits received principle

What will be an ideal response?

In a two-period model with production, an increase in the world real interest rate

A) increases domestic output and increases the current account surplus. B) increases domestic output and decreases the current account surplus. C) decreases domestic output and increases the current account surplus. D) decreases domestic output and decreases the current account surplus.