Equilibrium consumption level in each period

Assignment Help Business Management
Reference no: EM131482364

Consider the model of political accountability by Persson where the discount factor is δ = 0.5, the status quo payoffs for the executive and legislature are x^S = 0.04 and l^ S = 0.04 respectively, and the utility functions for both the executive and the legislature are v(x) = √ x in each period.

(1) Suppose one-player-veto checks and balances is used, namely the executive proposes (x, l) and the legislature chooses to veto or not. If the executive tries to grab as much as it can in the current period (and not being re-elected afterwards), how much it must offer to the legislature so that the legislature will not veto?

(2) Under one-player-veto checks and balances, what is the voters' equilibrium consumption level in each period?

(3) If two-stage budgeting is used instead, what is the voters' equilibrium consumption level in each period?

Reference no: EM131482364

Questions Cloud

Identify the companys business strategy : Identify the company's business strategy (what is it?), and Explain how their supply chain strategy supports the business strategy?
What is the cheapest way of producing an output : Inputs K, L, R and M cost £10, £6, £15 and £3 respectively per unit. What is the cheapest way of producing an output of 900 units if a firm operates.
First- and second-order conditions for the profit function : Find the profit-maximizing output (Q) by using first- and second-order conditions for the profit function.
How much should it employ to maximize profit : A firm operates in the short run with the production function q = 2L0.5 and faces the demand schedule p = 60 - 4q where p is price in pounds.
Equilibrium consumption level in each period : If two-stage budgeting is used instead, what is the voters' equilibrium consumption level in each period?
Labour productivity at the expense of lower employment : 1. An economist claims that ‘Minimum wage law increases labour productivity at the expense of lower employment'. Do you agree or disagree?
What is the rate of change of r with respect to i : The return R on a sum M invested at i per cent for 3 years is given by the formula R = M(1 + i)3.
How do childhood experience relate to health across lifespan : Which two implicit bias tests did you choose to take, and why? What are Adverse Childhood Experiences, and how do they relate to health across the lifespan?
Automatic adjustment to the balance of payment : The gold standard of the international monetary system is said to provide an automatic adjustment to the balance of payment disequilibrium.

Reviews

Write a Review

Business Management Questions & Answers

  Discuss the consequences of such a policy to u.s. consumers

If U.S. companies should not be liable, then they could be legally exempt from tort liability. Discuss the consequences of such a policy to U.S. consumers.

  Strength and coherence of logic within argument

The evaluation will focus on three dimensions: the strength and coherence of the logic within the argument.

  Rate of interest to finance your college education

You borrow money at a fixed rate of interest to finance your college education. If the rate of inflation unexpectedly slows down between the time you take out the loan and the time you begin paying back it back, is there a redistribution of income..

  Model of training processesdescribe how the model of

model of training processesdescribe how the model of training processes serves as a problem-solving tool. include a

  Present value of a loan that calls

What is the present value of a loan that calls for the payment of $500 per year for six years if the discount rate is 10% and the first payment will be made one year from now? How would your answer change if the $500 per year for occurred for ten..

  Problem regarding the christian principles

For this assignment, you will discuss how Christian principles can be applied to ethical issues in statistics.

  How climate change impact on global businesse

Write an article:-Give critics on how climate change impact on global businesses. Introduction(a)Damage to property and infrastructure(b)Reduction in productivity

  Government of sudan correct

The argument was based on the fact that the case involved citizens of states of the United States in an attempt to sue a foreign government, something not permitted under federal law. Is the government of Sudan correct in this case? Explain.Rux v...

  Fundamental components of incident management system

Define the fundamental components of the Incident Management System as they apply to the management of Weapons of Mass Destruction incidents. Must be in third person, and have a clear thesis introductory paragraph.

  Diversity issues inherent in the organisation

Management is supportive of positive resolution and reluctant to lose staff members. Management perceive that the conflict is the result of: • diversity issues inherent in the organisation (eg. racial, gender, sexual, religious issues)

  What is strategy

Please read article "What is Strategy?" by Michael Porter, Harvard Business Review, November-December 1996 and in three paragraphs, write 3 lessons that you too away from the article and how to apply it to real life.

  Characterization of white society in new york city

Describe Hubert's characterization of white society in New York City during the Harlem Renaissance.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd