Please answer correct option explain plz Choose all true statements on the saving, investment and loanable funds market in a closed economy. (choose2)a. If the government opens up a budget deficit by cutting labor income tax, and workers save full proceedsof the tax cut, interest rate and investment do not change.b.If the government opens up a budget deficit by cutting labor income tax, and workers spend additionalincome saved from the tax cut, national saving falls and interest rate rises.O c.An increase in corporate income tax will lead to a higher equilibrium interest rate.d. Tax incentives for saving will lead to higher interest rates and thus lower investments.

Savers of the economy determine the supply of loans in the loanable funds market. Savers can be the…

Choose all true statements on the saving, investment and loanable funds market in a closed economy. (choose 2) a. If the government opens up a budget deficit by cutting labor income tax, and workers save full proceeds of the tax cut, interest rate and investment do not change. O b. If the government opens up a budget deficit by cutting labor income tax, and workers spend additional income saved from the tax cut, national saving falls and interest rate rises. O C. An increase in corporate income tax will lead to a higher equilibrium interest rate. d. Tax incentives for saving will lead to higher interest rates and thus lower investments.

Choose all true statements on the saving, investment and loanable funds market in a closed economy. (choose 2) a. If the government opens up a budget deficit by cutting labor income tax, and workers save full proceeds of the tax cut, interest rate and investment do not change. O b. If the government opens up a budget deficit by cutting labor income tax, and workers spend additional income saved from the tax cut, national saving falls and interest rate rises. O C. An increase in corporate income tax will lead to a higher equilibrium interest rate. d. Tax incentives for saving will lead to higher interest rates and thus lower investments.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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