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disa [49]
3 years ago
12

A year ago a country reduced the tax rate on all interest income from 20% to 10%. During the year private saving was $500 billio

n as compared to $400 billion the year before the tax reform. Taxes on interest income fell by $10 billion. Assuming no other changes in income, or government revenues or spending, which of the following is correct? a. the substitution effect was larger than the income effect; national saving rose b. the substitution effect was larger than the income effect; national saving fell c. the income effect was larger than the substitution effect; national saving rose d. the income effect was larger than the substitution effect; national saving fell
Business
1 answer:
pantera1 [17]3 years ago
6 0

Answer:

a. the substitution effect was larger than the income effect; national saving rose

Explanation:

In macroeconomics, the substitution effect means that as the return on savings increases, households will substitute current spending and will save more in order to be able to spend more in the future.

In this case, since interests from bonds, CDs, etc., are taxed at a much lower rate, the after tax return from investing on any of them increases. Households consider that the money that they can earn now by investing on them is more valuable than consuming goods or services immediately.

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Answer:

Control

Explanation:

According to my research on the different activities of process management, I can say that based on the information provided within the question Nigre is engaged in the Control Activity. This activity focuses on making sure all procedures, techniques, and policies are followed accordingly in order to meet all of the organizations goals and basically minimize the risk of defective products or problems occurring. Which is what Nigre is doing by monitoring the production process and making sure everything is meeting the specifications.

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vladimir1956 [14]

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4 0
10 months ago
The financial ratio that shows the relationship between the price of a company's stock and the company's net worth (stockholders
Paha777 [63]

Answer:

A

Explanation:

5 0
1 year ago
Explain what a cash budget is and why it is important for all businesses.
deff fn [24]

Answer:

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