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Which of the Following Are Both Correct

Question 25

Multiple Choice

Which of the following are both correct?


A) Data show no correlation between saving and measures of economic well-being.A reduction in tax rates may reduce saving because of the income effect.
B) Data show no correlation between saving and measures of economic well-being.A reduction in tax rates may reduce saving because of the substitution effect.
C) Data show a positive correlation between saving and measures of economic well-being.A reduction in tax rates may reduce saving because of the income effect.
D) Data show a positive correlation between saving and measures of economic well-being.A reduction in tax rates may reduce saving because of the substitution effect.

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