What Effects Does a Higher Rate of Return Have on Saving

Multiple Choice

What effects does a higher rate of return have on saving?

A) A higher rate of return has an income effect that discourages saving and a substitution effect that encourages saving.
B) A higher rate of return has an income effect that encourages saving and a substitution effect that discourages saving.
C) A higher rate of return has income and substitution effects that both decrease saving.
D) A higher rate of return has income and substitution effects that both increase saving.