True, False, or Uncertain? Explain. A person who reacts to a reduction in a proportional income tax

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True, False, or Uncertain? Explain.
A person who reacts to a reduction in a proportional income tax by saving more has an income effect that is larger than her substitution effect. (graph required)

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Public Finance

ISBN: 978-1111526986

2nd edition

Authors: John E. Anderson

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Question Posted: Feb 12, 2016 06:04 AM

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True, False, or Uncertain? Explain. A person who reacts to a reduction in a proportional income tax

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False this person has a substitution effect that dominates See t...View the full answer

Public Finance

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