Multiple Choice
Which of the following might explain a decrease in national saving when the tax rate on savings is reduced?
A) its substitution effect on saving and its effect on the government budget
B) its substitution effect on saving but not its effect on the government budget
C) its effect on the government budget but not its substitution effect on saving
D) neither its substitution effect on saving nor its effect on the government budget
Correct Answer:
Verified
Correct Answer:
Verified
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