An increase in the tax rate on interest income will lead to: Select one: O a. More saving, more investment, and more economic growth. O b. Decreased government spending due to its increased tax revenues. O C. Less saving, less investment, and lower economic growth. O d. A strong substitution effect: people will work more and rely less on investments as their source of income. O e. Less saving, more spending, and more economic growth.

An increase in the tax rate on interest income will lead to: Select one: O a. More saving, more investment, and more economic growth. O b. Decreased government spending due to its increased tax revenues. O C. Less saving, less investment, and lower economic growth. O d. A strong substitution effect: people will work more and rely less on investments as their source of income. O e. Less saving, more spending, and more economic growth.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter12: Labor Markets And Labor Unions

Section: Chapter Questions

Problem 1.2P

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