Asked by cristian sanchez on May 02, 2024
Verified
A higher return on saving ______ the amount a household needs to save to achieve any target level of future consumption. This effect on saving is called the _______ effect. If the income effect is large enough, then a reduction in taxes on saving might ______ tax revenues.
Income Effect
The change in consumer's purchasing behavior due to a change in their income, affecting how much of a product they buy.
Tax Revenues
The income that is gained by governments through taxation, used to fund public services, infrastructure, and government obligations.
- Evaluate the effectiveness of various government policies on saving and investment behaviors.
Verified Answer
ZK
Learning Objectives
- Evaluate the effectiveness of various government policies on saving and investment behaviors.
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